US DOJ Shuts Down Cryptocurrency Enforcement Unit Amid Policy Shift

By: Isha Das

The United States Department of Justice (DOJ) has reportedly disbanded its National Cryptocurrency Enforcement Team (NCET), a significant development in the enforcement of digital asset-related regulations. NCET was initially established in 2021 under the Biden administration with the aim of tackling crimes involving digital currencies. It combined expertise from different DOJ divisions, including cybercrime and money laundering units, and was responsible for investigating high-profile cases such as the usage of Tornado Cash and operations linked to North Korean crypto activities.

This decision comes as part of a broader shift in the federal oversight of the crypto industry. Deputy Attorney General Todd Blanche has reportedly communicated through an internal memo that the DOJ's future focus will now be on prosecuting criminal activities like fraud, scams, and market manipulation rather than targeting legitimate entities, including exchanges and wallet providers. Blanche emphasized this approach as a move away from the previous administration's strategy of "regulation by prosecution". He reiterated that the DOJ’s role is not to act as a financial regulator but rather concentrate efforts on bad actors within the space.

The DOJ's move fits into a larger framework of re-evaluation of federal crypto policies coinciding with President Donald Trump's tenure. Regulatory bodies such as the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) are also reviewing their policies to align with the new administration’s priorities. In a related development, Acting SEC Chair Mark Uyeda has announced plans for a comprehensive review of existing policies to identify outdated staff statements and align them with the current agency objectives.

This recalibration, aimed at creating a more favorable environment for crypto innovation, signifies potential changes ahead in how crypto regulations will be enforced across the United States. The shift towards a more innovation-friendly approach, alongside redefined DOJ priorities, reflects the evolving landscape of digital asset regulation under the Trump administration and its implications for the crypto industry at large.