Crypto News: Justice Department Dismantles Crypto Unit as Trump Pushes Deregulation Agenda

The U.S. Department of Justice has disbanded its National Cryptocurrency Enforcement Team (NCET), according to a memo sent to staff on Monday evening. This crypto news didn’t do much favor to the larger narrative.

U.S. Deputy Attorney General Todd Blanche announced the immediate closure of the unit in a four-page document reviewed by Fortune .

It follows President Donald Trump’s January executive order regarding digital assets. The order was to provide “regulatory clarity” to the cryptocurrency space.

Crypto News: Shift in priorities in crypto enforcement under Trump

The memo by Deputy Attorney General Blanche is a significant shift in the manner in which the Justice Department will handle cryptocurrency investigations in the future. Instead of targeting crypto platforms and infrastructure, Blanche directed DOJ employees to focus primarily on “prosecuting individuals who victimize digital asset investors.”

Specifically, the directive instructs prosecutors to avoid pursuing cases against cryptocurrency exchanges, mixing services like Tornado Cash, and “offline wallets.”

NCET had previously collaborated on several high-profile cases in the cryptocurrency space. These included actions against Tornado Cash, a mixing service that scrambled crypto funds to obscure ownership, and the prosecution of Avraham Eisenberg. Eisenberg is a hacker who exploited a crypto trading protocol for more than $100 million.

The unit was also involved in investigations concerning North Korean actors who helped launder proceeds from cryptocurrency hacks. The dissolution of NCET marks a concrete step in implementing the Trump administration’s approach to cryptocurrency.

DOJ’s crypto move is a part of deregulation agenda

The shutdown of the DOJ’s cryptocurrency enforcement division fits with the Trump administration’s broader push to ease regulatory scrutiny of the digital asset sector. As Fortune reports, it follows previous instructions to civil agencies like the Securities and Exchange Commission and the Commodity Futures Trading Commission to dial back their regulatory heat on crypto companies.

President Trump has made a number of pro-cryptocurrency moves since being back in office. In March, he signed an executive order to permit the establishment of a strategic Bitcoin and digital assets reserve. Shortly later, Trump welcomed top cryptocurrency executives to Washington, D.C., for a summit on legislative priorities for the sector.

In this summit, Trump expressed his backing for the industry, saying:

“I promised to make America the Bitcoin superpower of the world and the crypto capital of the planet. And we’re taking historic action to deliver on that promise.”

These policy changes are a complete turnabout from the previous administration’s policy. The previous policy had focused on more stringent regulation and enforcement in the cryptocurrency market.

The Trump administration seems to be making the United States a friendlier place for cryptocurrency businesses and investors as part of its economic policy. This continues amid crypto news narrative slightly improving.

DOJ’s previous crypto enforcement history

Before NCET’s dissolution, the Department of Justice had compiled a significant record of enforcement action in the field of cryptocurrency.

The DOJ’s Market Integrity and Major Frauds (MIMF) Unit had prosecuted cases with over $2 billion of intended financial harm to investors across the globe. They have prosecuted schemes of fraud, market manipulation, and unregistered exchanges too.

Some of the significant enforcement techniques of the department included its use of Section 1960 of the U.S. Code to prosecute individuals and firms as unregistered money transmitting business. This was applied to cryptocurrency exchanges that had failed to register with the Financial Crimes Enforcement Network (FinCEN) or establish appropriate Anti-Money Laundering (AML) programs.

In January 2023, the DOJ collaborated with the US Treasury Department to shut down Bitzlato, a Chinese-based cryptocurrency exchange. The authorities accused Bitzlato of being a “primary money laundering concern,” especially for Russian illicit finance and cybercriminals.

The NCET unit had been at the center of coordinating these enforcement actions across different DOJ divisions and other agencies.Its disbandment is a major change in how the federal government will approach cryptocurrency-related criminal activity going forward, with a narrower focus on individual bad actors rather than the broader infrastructure of cryptocurrency services.

By moving away from what Deputy AG Blanche described as “regulation by prosecution” toward a more industry-friendly stance, the administration appears to be delivering on Trump’s promise to make America “the crypto capital of the planet.”