The US Department of Justice (DOJ) has made a significant decision to shut down its National Cryptocurrency Enforcement Team (NCET), a specialized division that was established in 2021 under the Biden administration to investigate crypto-related crimes. This move, which was confirmed through an internal memo cited by Fortune in an April 8 report, marks a notable shift in federal oversight of the rapidly evolving crypto industry.
The NCET was comprised of experts from various DOJ divisions, including cybercrime and money laundering units, who worked together to tackle high-profile cases involving digital assets. The task force was involved in enforcement actions targeting platforms like Tornado Cash and investigating crypto activity associated with North Korean operatives.
However, Deputy Attorney General Todd Blanche has clarified the DOJ’s new direction, emphasizing that the department’s primary focus will now be on prosecuting bad actors within the crypto sector, rather than taking a broad approach towards regulating the industry as a whole. Blanche stated that the DOJ is not a financial regulator and criticized the previous administration’s strategy of enforcing unclear crypto rules through litigation.
As a result, DOJ personnel have been directed to concentrate solely on targeting criminal activity within the crypto industry, particularly scams, fraud, and market manipulation. Legitimate entities such as crypto exchanges, wallet providers, and decentralized privacy tools will not be subjected to intense scrutiny under the new approach.
This shift in strategy by the DOJ is part of a broader recalibration across federal agencies as President Donald Trump aims to foster a more favorable environment for crypto innovation. Regulatory bodies such as the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) are also reviewing their crypto policies to align with the new administration’s objectives.
Acting SEC Chair Mark Uyeda has confirmed plans for a comprehensive review of existing policies, including the Howey Test, which determines whether a digital asset qualifies as a security. This review aims to identify staff statements that should be modified or rescinded in line with current agency priorities.
In conclusion, the DOJ’s decision to disband the NCET and adopt a more targeted approach towards combating criminal activity in the crypto sector reflects a shift in regulatory focus towards fostering innovation while cracking down on illicit activities. This move, alongside similar efforts by other federal agencies, underscores the evolving landscape of crypto regulation in the United States.