The U.S. Department of Justice has disbanded its National Cryptocurrency Enforcement Team (NCET), calling the Biden-era initiative a “reckless strategy” and redirecting efforts under the Trump administration toward a more investor-protection-centric approach.
Background
- In a memo circulated late Monday and reviewed by Fortune, U.S. Deputy Attorney General Todd Blanche announced the immediate dissolution of the National Cryptocurrency Enforcement Team (NCET), the DOJ’s unit formed in 2021 to investigate and prosecute crypto-related crimes.
- Blanche, who also served as Donald Trump’s defense attorney in his 2024 trial, emphasized that the DOJ is not a regulatory body and criticized the previous administration for overstepping by using prosecutions as a form of crypto regulation.
- NCET was initially designed as a joint effort involving prosecutors from DOJ’s cybercrime and money laundering divisions.
- The task force led several high-profile investigations, including cases against crypto mixer Tornado Cash, Mango Markets exploiter Avraham Eisenberg, and North Korean operatives tied to illicit crypto laundering schemes.
- The unit became a focal point in the U.S. government’s attempt to enforce order in the largely unregulated digital asset sector.
Why Should You Pay Attention?
- The disbandment of NCET signals a significant regulatory shift in the U.S. government’s approach to digital assets.
- Rather than pursuing broad enforcement actions against crypto exchanges and privacy tools, the DOJ will now prioritize prosecuting fraud and scams targeting individual investors.
- This change aligns with President Trump’s broader crypto-friendly agenda, which includes efforts to position the U.S. as a global leader in blockchain and Bitcoin adoption.
- It also raises questions about how crypto crimes, especially those tied to mixers, decentralized platforms, and international bad actors will be handled moving forward.
Who Said What?
- Deputy Attorney General Todd Blanche wrote in the internal DOJ memo:
“The Department of Justice is not a digital assets regulator. However, the prior Administration used the Justice Department to pursue a reckless strategy of regulation by prosecution."
- Blanche also directed that DOJ staff should now focus exclusively on prosecuting individuals who defraud or exploit digital asset investors, adding that the department would refrain from targeting mixers, decentralized exchanges, and offline crypto wallets going forward.
- Meanwhile, former President Donald Trump doubled down on his pro-crypto stance in a recent public summit, 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.”
Zooming Out
- The DOJ’s dismantling of NCET is the latest in a growing list of deregulatory steps taken by the Trump administration to reshape America’s crypto landscape.
- From instructing the SEC and CFTC to ease enforcement to launching a strategic Bitcoin reserve, the administration has taken a clear stance to promote innovation over regulation.
- While some industry leaders welcome this pivot, critics argue that reducing oversight could embolden malicious actors and weaken consumer protection.
- Whether this hands-off approach creates a new era of crypto growth or exposes the system to greater risk remains to be seen. What’s clear is that the U.S. regulatory climate is changing and so far, it seems fast.
