The U.S. Department of Justice (DOJ) has officially shut down its digital assets crime division, the National Cryptocurrency Enforcement Team (NCET), in a big policy change under President Donald Trump’s administration.
This is a 180-degree change from the Biden-era approach that used enforcement to regulate digital assets.
The move was announced in a four-page memo from Deputy Attorney General Todd Blanche, who was Donald Trump’s defense attorney.
Blanche wrote the DOJ “is not a digital assets regulator” and slammed the Biden administration for what he called a “reckless strategy of regulation by prosecution.”
Formed in 2021 under President Joe Biden, the NCET was tasked with investigating illegal digital asset activities, such as money laundering, fraud, and platforms used by criminal organizations.
The team worked on high-profile cases, including Tornado Cash and the $100 million Mango Markets fraud by Avraham Eisenberg.
Blanche has told DOJ staff to stop going after bitcoin and digital asset platforms and instead focus on individual bad actors who harm investors or use digital assets for crimes like terrorism, hacking and drug trafficking.
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Going forward, cases involving digital assets will be handled by U.S. attorney’s offices across the country and the DOJ will only get involved for serious criminal offenses.
The Department will no longer pursue “litigation or enforcement actions that have the effect of imposing regulatory frameworks on digital assets,” Blanche wrote.
The Trump administration has been critical of the Biden White House’s approach to bitcoin and digital assets oversight. Under Biden, the DOJ and agencies like the SEC were giving Bitcoin companies a hard time.
Now that’s being undone. In the memo, Blanche said:
“The prior Administration used the Justice Department to pursue a reckless strategy of regulation by prosecution, which was ill conceived and poorly executed.”
He added that future DOJ efforts will focus on going after bad actors not the platforms they use, like mixers or cold wallets, unless those tools are directly involved in crimes.
So services like Tornado Cash, which anonymize transactions, may no longer face prosecution unless there is clear involvement in scams, hacks or fraud.
NCET’s shutdown is part of a broader trend under Trump. Since taking office, Trump has been pro-Bitcoin, saying he wants to make the US the “crypto capital of the world.”
The SEC under acting chair Mark T. Uyeda is also scaling back its digital asset enforcement unit. One of its top litigators, Jorge Tenreiro, has been reassigned to a tech department role.
Trump’s change has the Bitcoin world divided. Privacy advocates are hailing the DOJ’s new approach as reducing government overreach. Others worry it will make it easier for criminals to use digital assets.
