DOJ Shuts Down Crypto Enforcement Team, Shifts to Pro-Industry Approach

The US Department of Justice (DOJ) has abruptly shut down its National Cryptocurrency Enforcement Team (NCET), marking the end of a key pillar of federal crypto oversight established under the Biden administration. This decision aligns with the broader regulatory easing for crypto under the Trump administration.

The announcement was made Monday evening in a four-page memo from Deputy Attorney General Todd Blanche, a longtime ally of President Trump. The memo stated that the DOJ would no longer act as a de facto crypto regulator and would immediately cease broad enforcement actions against crypto platforms and protocols. This shift represents a significant change in how federal authorities treat digital assets, moving away from high-profile crackdowns towards a more streamlined, pro-industry approach that mirrors Trump’s broader crypto-friendly agenda.

According to the memo, the DOJ is not a digital assets regulator and the previous administration used the Justice Department to pursue a reckless strategy of regulation by prosecution. The NCET, created in 2021 under the Biden administration, coordinated some of the most consequential crypto enforcement actions to date, including the prosecution of Tornado Cash developers, the arrest of Avraham Eisenberg over a $100 million exploit, and investigations into North Korean crypto laundering.

Blanche’s directive clarifies that future DOJ efforts will focus on targeting individual bad actors who defraud crypto investors, rather than infrastructure providers like exchanges, mixers, or wallet developers. This includes stepping away from cases involving privacy-focused protocols and decentralized platforms, areas where critics had accused the DOJ of criminalizing open-source code.

Until now, the NCET had symbolized the government’s most forceful efforts to rein in crypto. Its collaboration with international partners to disrupt exchanges and its seizure of billions in Bitcoin from Silk Road-related wallets were milestones in digital asset enforcement. However, critics argued that the unit’s broad approach, particularly targeting decentralized protocols like Tornado Cash, blurred the line between crime prevention and technological suppression.

Trump’s DOJ now appears to agree with this criticism. By dismantling the task force, Blanche has reoriented federal priorities toward punishing identifiable fraud, rather than prosecuting platforms that facilitate crypto transactions. This move aligns with Trump’s accelerating adoption of digital assets. In March, the president issued an executive order directing federal agencies to scale back aggressive oversight and promote a clear regulatory framework for crypto. He also announced plans to establish a national Bitcoin reserve, framing digital assets as a strategic economic and monetary resource.

The memo suggests that these promises are now translating into policy. In addition to the DOJ pulling back, civil regulators have also received instructions to soften their stance on digital assets. Recent actions indicate that the DOJ will continue pursuing threats tied to terrorism financing and individual fraud, including seizures of funds linked to criminal activities and criminal pleas in laundering cases.