Crypto Unit Under US DOJ Disbands

In a sweeping shift in US crypto enforcement policy, the Department of Justice (DOJ) has officially disbanded its National Cryptocurrency Enforcement Team (NCET), signalling a significant departure from the regulatory stance of the previous administration.

Established in 2021 under President Biden, the NCET played a central role in prosecuting high-profile crypto cases—ranging from the Tornado Cash developers to Avraham Eisenberg’s $100 million exploit, and efforts to disrupt North Korean money laundering operations.

The abrupt shutdown, announced in a four-page memo by Deputy Attorney General Todd Blanche—a close Trump ally and personal attorney to the president—marks a decisive move by the Trump administration to scale back federal oversight of digital assets.

The DOJ will no longer act as a de facto regulator of the crypto industry, nor pursue broad enforcement against platforms and protocols.

Citing Blanche in the memo, he stated:

“The Department of Justice is not a digital assets regulator. The prior Administration used the Justice Department to pursue a reckless strategy of regulation by prosecution.”

Instead, the focus will shift toward prosecuting individual bad actors who defraud investors, steering clear of actions against infrastructure providers such as exchanges, mixers, and wallet developers.

This pivot aligns with the administration’s broader crypto-friendly agenda, aiming to position the US as a global leader in digital asset innovation.

It also retreats from contentious enforcement areas—particularly privacy-focused and decentralised technologies—where critics have accused the DOJ of stifling open-source development.

With NCET now officially dissolved, the federal government’s approach to crypto appears headed for a dramatic transformation.

Navigating the Path to Regulatory Transparency in Trump’s Era

The NCET once represented the federal government’s most aggressive front in regulating the crypto industry.

From coordinated international crackdowns on exchanges like Garantex to seizing billions in Bitcoin tied to Silk Road-era wallets, the task force set enforcement precedents in the digital asset space.

Yet its sweeping actions—especially against decentralised platforms such as Tornado Cash—sparked backlash, with critics arguing that it blurred the line between combating crime and stifling innovation.

Paul Grewal, Coinbase’s Chief Legal Officer, wrote recently:

“…blocking open source technology entirely because a small portion of users are bad actors is not what Congress authorized. These sanctions stretched Treasury’s authority beyond recognition, and the Fifth Circuit agreed."

The Trump administration now appears to share that concern.

By dismantling NCET, Blanche has shifted the DOJ’s focus squarely toward prosecuting clear-cut financial fraud—such as Ponzi schemes, phishing operations, and deceptive investment platforms—rather than targeting the technological infrastructure underpinning crypto.

This change dovetails with Trump’s broader pro-crypto posture.

In March, he issued an executive order urging federal agencies to scale back aggressive oversight and prioritise the creation of a transparent, innovation-friendly regulatory framework.

The order also included a bold initiative: establishing a national Bitcoin reserve, positioning digital assets as a cornerstone of America’s economic strategy.

Blanche’s memo signals the first major implementation of this vision.

Alongside the DOJ’s new approach, civil regulators have reportedly been instructed to ease their stance as well.

Still, this does not equate to a full regulatory retreat.

The DOJ will continue pursuing threats linked to terrorism financing and direct criminal conduct.

Recent actions—such as fund seizures tied to Hamas and criminal convictions in laundering cases—highlight that enforcement is far from over, but is now more narrowly focused on bad actors, not the tools they use.

DOJ to End Investigations into Crypto Exchanges and Wallets

The US DOJ has also announced it will no longer pursue criminal investigations or prosecutions against cryptocurrency exchanges, wallet providers, and mixing services such as Tornado Cash.

The directive—issued alongside the disbanding of the DOJ’s NCET—marks a dramatic departure from years of aggressive enforcement and has sparked a sharply divided response across the crypto community.

Some hail the move as a long-overdue reprieve that could unlock innovation and reduce legal uncertainty, while others warn it may embolden fraud and financial crime.

The DOJ’s statement claimed:

“The Justice Department will stop participating in regulation by prosecution in this space. Specifically, the Department will no longer target virtual currency exchanges, mixing and tumbling services, and offline wallets for the acts of their end users or unwitting violations of regulations.”

Under the new guidance, the DOJ will retain the authority to prosecute individuals engaged in clear-cut fraud or illicit financial activity but will refrain from targeting platforms or developers whose tools are misused by third parties.

The shift reflects a broader recalibration of US financial regulatory policy under the Trump administration.

Federal agencies such as the SEC and FDIC have been directed to reassess their approaches to crypto oversight, with a focus on protecting innovation while preventing systemic risks.

In a further signal of this new stance, the DOJ indicated it will drop ongoing investigations into crypto platforms and has urged regulators to revisit how victim compensation is handled in digital asset cases.

While the announcement may be viewed as a regulatory green light for the crypto sector, it also raises questions about how the US will balance innovation with investor protection and the fight against financial crime in a rapidly evolving digital economy.

Will We Lose the Fight Against Crypto Crime?

The DOJ’s announcement sent shockwaves through the crypto community, with reactions ranging from celebration to alarm.

On social media, some users sardonically declared that “crime is legal now,” highlighting growing unease about the implications of this dramatic policy shift.

At a time when crypto scams are surging and market conditions remain unstable, critics argue the Department may be stripping away essential guardrails with no clear plan for enforcement.

By stepping back from policing exchanges and mixers, the DOJ is limiting its ability to intervene in key areas of digital finance, potentially opening the door to unchecked abuse.

For crypto businesses, this move offers newfound operational freedom—but it also raises the stakes.

Without strong regulatory oversight, can innovation thrive without compromising investor safety?

Or is this a risky bet that could invite the very disasters the DOJ once sought to prevent?