DOJ scales back efforts to fight cryptocurrency fraud

• The Department of Justice will reduce its focus on regulating cryptocurrency. It will now shift efforts to crimes involving crypto, such as drug trafficking and human trafficking.
• Deputy Attorney General Todd Blanche announced the dismantling of the National Cryptocurrency Enforcement Team, which was created in 2022 to address criminal misuse of digital assets.
• This change follows President Trump’s executive order on digital currency regulations, and his campaign promises to ease crypto regulations, which led to significant donations from tech investors.

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The Department of Justice is planning to scale back its legal fight against cryptocurrency fraud. In a memo obtained by the Washington Post, Deputy Attorney General Todd Blanche made the announcement to staff on Monday, April 7, saying the DOJ will no longer pursue litigation or enforcement actions related to regulatory aspects of digital assets. Instead, Blanche said, prosecutors should focus on crimes involving cryptocurrency, such as drug and human trafficking.

Blanche also said he would get rid of the National Cryptocurrency Enforcement Team, which was established in 2022 to “address the challenge posed by the criminal misuse of cryptocurrencies and digital assets.”

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The change comes after President Donald Trump issued an executive order directing the department to reevaluate its guidelines impacting digital currency.

What is Trump’s history with crypto?

During his 2024 campaign, Trump promised to ease regulations against crypto companies, leading to big donations from tech investors.

Last month, Trump pardoned four people involved with the cryptocurrency exchange, Bitmex. The founders of the exchange pleaded guilty in 2022 for failing to implement anti-money laundering and identity verification systems.

What happens next?

Blanche has ordered all open investigations that don’t follow the DOJ’s new guidelines to be closed.