The U.S. Department of Justice is reorienting the way that it will approach regulations on cryptocurrencies. Rather than targeting the entire industry, they will target individuals who use crypto in ill ways.
That shift, which was reported by Deputy Attorney General Todd Blanche, will also end the National Cryptocurrency Enforcement Team (NCET) that was established in 2022 to combat fraud in cryptocurrencies. This new policy meets President Donald Trump’s call for clearer regulations and less action on the crypto industry. The DOJ’s statement demonstrates a more favorable outlook for cryptocurrency regulations. This will assist firms in the blockchain and crypto sectors without diminishing measures against crime. It might also bring about less complicated regulations and less confusion in the crypto industry.
Background of NCET
The NCET was created under the Biden administration to be a dedicated unit made up of prosecutors from the DOJ’s money laundering and cybercrime units. It was originally meant to look into and pursue charges related to illicit behavior in the crypto space, including the laundering of money, fraud, and violations of anti-money laundering laws. The unit has played a central role in high-profile prosecutions of top industry figures such as Binance and Tornado Cash.
The U.S. Department of Justice (DOJ) has decided to dismantle its National Cryptocurrency Enforcement Team (NCET) and focus on other issues besides prosecuting cryptocurrency firms for regulatory violations. It will target those who use digital assets for things like terrorism, drug trafficking, and scams.
The shift, with Deputy Attorney General Todd Blanche at the helm, marks a stark departure from the previous administration’s strategy of “regulation by prosecution.” The DOJ seeks to create a more business-friendly environment for the cryptocurrency industry without halting the penalization of criminal exploitation. This policy aligns with President Donald Trump’s policy to position the U.S. as the global hotbed of crypto innovation
Major DOJ Crypto Enforcement Actions
Tornado Cash Case
The DOJ charged Tornado Cash developers, Roman Storm and Roman Semenov, with allegedly laundering over 1 billion in criminal proceeds including North Korean hacker cash, sparking outrage from the crypto community that the creators were being held liable for writing open-source code, which ultimately ended with the case being dropped and Tornado Cash being delisted from the U.S. Treasury’s OFAC sanctions list.
Binance Case
The DOJ similarly accused Binance and its chief executive Changpeng Zhao in a well-publicized crypto case of willfully violating anti-money laundering laws, and while the action was settled with a 4 billion fine from Binance, Zhao pleaded guilty and was sentenced to four months incarceration and a 50 million criminal fine.
BitMEX Case
The DOJ indicted the derivatives exchange BitMEX for Bank Secrecy Act violations, and indicted its executives, such as co-founders Arthur Hayes, Benjamin Delo, Samuel Reed, and Gregory Dwyer, with failing to institute proper know-your-customer procedures, and all four executives pleaded guilty, to Hayes, Delo, and Reed receiving 18- to 30-month probation, and Hayes serving six months home detention, while Dwyer was fined $150,000 and received one year of probation.
KuCoin Case
In March 2024, the DOJ indicted the firm for being an unlicensed money-transmitting business and fell short of the Bank Secrecy Act, with the allegations stating the exchange served over 1.5 million U.S.-based users and received approximately 184.5 million in fees without registration, and in January 2025, KuCoin settled those allegations by agreeing to a 300 million fine.
The Shift and Changes in The Policy
Under the new guidance, the DOJ will no longer go after cryptocurrency exchanges, wallet providers, or services such as mixers and tumblers for regulatory offenses unless there is proof of willful misconduct. Instead, the emphasis will be on prosecuting those who use cryptocurrencies for criminal purposes, including terrorism financing, drug trafficking, human trafficking, organized crime, and investor scams.
Deputy Attorney General Blanche stressed that the DOJ is not a regulator of digital assets and denounced the previous administration’s approach as a “reckless strategy of regulation by prosecution.” This shift is part of a larger attempt to create a more business-friendly environment for blockchain and cryptocurrency firms while continuing to remain vigilant against criminal abuse.
Shift on Focus
The U.S. Justice Department (DOJ) has opted to slim down its cryptocurrency enforcement scope. It will instead target crimes like terrorism, drug cartels, and fraud involving digital assets.
On April 7, Deputy Attorney General Todd Blanche made this change official in a memo. The DOJ will leave the majority of cryptocurrency-related activity to regulators, according to him. This is a move away from the previous administration using the DOJ to go after folks via prosecution as a means of furthering the regulations.
The DOJ also disbanded its National Cryptocurrency Enforcement Team (NCET). It will terminate investigations that do not match its new priorities. Note: Eminent domain requires that the new program will not prosecute crypto firms for their customers’ operations or unintended regulatory lapses which is by the order of President Donald Trump. This is an order that definitively leans towards the appropriate use of digital assets and blockchain technology. It also directs government agencies to review and amend regulations that could be harmful to the digital asset industry.
Other organizations have changed their policies too. For example, the Securities and Exchange Commission (SEC) adopted a different approach to regulating digital assets. It now prefers public rulemaking instead of enforcement actions. And the Federal Deposit Insurance Corporation (FDIC) has also allowed institutions to engage in crypto activities without preapproval, as long as they manage risks properly.
NEW STANCE ON CRYPTO
Since becoming president, Donald Trump has wanted to make rules for cryptocurrency easier. He is still pushing for this in his 2024 campaign. Regulators are changing their approach to have more control over the industry. The Securities and Exchange Commission (SEC) has moved its crypto enforcement team and is stepping back from some big cases. Moreover a U.S. banking regulator allowed banks to do some crypto activities, showing a change in policy. Deputy Attorney General Todd Blanche said the Justice Department would not go after virtual currency exchanges and other services for small rule breaches. He also told prosecutors not to take action against anyone breaking banking, securities, or commodities laws unless there is clear proof of wrongdoing. Trump and his family have ties to the crypto world.
It has been reported that they receive 75% of profits from token sales by World Liberty Financial, a crypto investment. Before he became president, Trump created a crypto token, and there are companies behind “meme coins” TRUMP and MELANIA, which are meant to show support, not as investments. These changes match the government’s positive view of blockchain and virtual assets and aim to encourage innovation and change the rules.
Challenges
While the DOJ’s new approach has been welcomed by the majority in the cryptocurrency community, it has also attracted controversy. Some critics argue that limiting enforcement action against companies could lead to a lack of accountability and oversight, and this could enable malicious players to exploit the system. In addition, the elimination of the NCET could prevent the DOJ from addressing complex cases of large-scale fraud and money laundering
Conclusion
The U.S. Department of Justice is changing how it handles cryptocurrency cases. Instead of going after all companies or technologies, it will focus on punishing specific wrongdoers. This change, seen in the ending of the NCET and a new emphasis on the illegal use of digital money, creates a better environment for blockchain and crypto businesses. Supported by President Trump’s administration, this new policy matches changes in other agencies, aiming to make things easier for businesses while still protecting against wrongdoing.
However, some people worry that less control over companies might lead to more bad behavior and less protection for consumers. How well this new approach works will depend on how it is carried out finding the right balance between encouraging new ideas and holding people accountable will be important. As the world of cryptocurrency changes, the laws that govern it will also change, with the DOJ’s new policy being an important step in that direction.
