US DoJ Disbands Crypto Enforcement Team

The Donald Trump administration continues its efforts to bolster the cryptocurrency industry, even as the US President unleashes global economic turmoil with his trade tariffs.

The Associated Press reported that it had reviewed a memo that the US Justice Department (DoJ) is disbanding a team of prosecutors who targeted cryptocurrency crimes, and is shifting its focus away from complex crypto-related cases involving banking and securities law.

Soon after he began his second term in office in January, US President Donald Trump had signed an executive order setting up a cryptocurrency working group aimed at bringing in crypto-friendly policies, in a major shift from the Biden administration.

Wooing crypto

Since then Trump continued to court the crypto sector, after his Presidential campaign was heavily funded by crypto companies, and he had promised a crypto-friendly regulatory environment.

Trump has also appointed pro-crypto allies to key regulatory positions.

Evidence of Trump’s crypto friendly approach also came in February, when the US Securities and Exchange Commission (SEC) announced it was seeking to pause its high-profile lawsuit against the cryptocurrency exchange Binance.

Then in March the SEC agreed in principle to dismiss a lawsuit against crypto firm Kraken, that had accused the firm of acting as an unregistered securities exchange.

And later in March Trump’s nominee for SEC Chairman, Paul Atkins, pledged a “rational, coherent, and principled approach” for digital assets.

Paul Atkins is a noted cryptocurrency advocate, but his confirmation process has been delayed due to extensive financial disclosures related to his family’s wealth and professional ties to crypto exchanges and DeFi platforms.

DoJ team disbanding

Now the Associated Press has reviewed a memo that revealed the Justice Department is disbanding a team of prosecutors who targeted cryptocurrency crimes.

“The Department of Justice is not a digital assets regulator,” Deputy Attorney General Todd Blanche was quoted as saying in the memo sent to prosecutors Monday.

Blanche alleged in the memo that the previous Biden administration had used the department to “pursue a reckless strategy of regulation by prosecution, which was ill conceived and poorly executed.”

Instead, Blanche reportedly said, the department’s narrower crypto-related priorities will target people and entities that rip off crypto investors or use digital assets to fund criminal conduct like human trafficking, drug running or terrorism.

AP noted that the National Cryptocurrency Enforcement Team was created during President Joe Biden’s administration with the explicit goal of targeting exchanges, mixers and others “that are enabling the misuse of cryptocurrency and related technologies to commit or facilitate criminal activity.”

But Blanche reportedly said those kinds of entities will no longer be targeted for “the acts of their end users or unwitting violations of regulations.”

Blanche said the National Cryptocurrency Enforcement Team’s disbandment is effective immediately.

He also said the Market Integrity and Major Frauds Unit “will cease cryptocurrency enforcement in order to focus on other priorities, such as immigration and procurement fraud.”