Trump Administration Disbands DOJ's Cryptocurrency Enforcement Team

The Trump administration has reportedly disbanded the Department of Justice's National Cryptocurrency Enforcement Team (NCET), marking a significant shift in the federal government's approach to regulating and enforcing laws related to digital currencies. The dissolution was noted in a memo by United States Deputy General Todd Blanche, who stated that the Department of Justice is not a digital assets regulator and criticized the previous administration's strategy of regulation by prosecution.

Established in October 2021 under President Joe Biden, the NCET was tasked with investigating and prosecuting platforms that facilitate criminal activities such as money laundering and hiding criminal proceeds. The team had been active since February 2022, but its website remains online despite the disbandment, which is reportedly effective immediately. This move is part of the efforts to comply with Trump’s late January executive order reshaping US crypto policy.

Before returning to office, Trump campaigned on a pro-crypto policy, promising the creation of a United States strategic Bitcoin reserve and positioning the US as a global crypto leader. He also appointed a pro-crypto Securities and Exchange Commission chairman. However, critics have raised concerns over potential conflicts of interest, given Trump and his family's involvement in various crypto projects, including the World Liberty Financial decentralized finance protocol and the Official Trump memecoin.

The dissolution of the NCET raises questions about the future of cryptocurrency regulation and enforcement in the United States. Without a dedicated enforcement team, the Department of Justice may struggle to keep up with the rapidly evolving landscape of digital currencies. This could potentially lead to an increase in cryptocurrency-related crimes, as criminals may see an opportunity to exploit the lack of specialized enforcement.

Moreover, the closure of the team could also impact the broader regulatory environment for digital currencies. The absence of a dedicated enforcement team may signal to other regulatory bodies that the federal government is not prioritizing cryptocurrency regulation. This could lead to a lack of coordination and consistency in regulatory policies, further complicating the already complex landscape of digital currency regulation.

The Trump administration's decision to disband the NCET is a clear indication of its priorities and approach to federal enforcement. By shutting down the team, the administration is sending a message that it does not view cryptocurrency regulation as a top priority. This decision is likely to have significant implications for the cryptocurrency industry and the broader regulatory environment, and it remains to be seen how the industry will adapt to this new reality.