A recent decision by the Department of Justice (DOJ) to disband its National Cryptocurrency Enforcement Team (NCET) has sparked strong criticism from a group of US Democratic lawmakers, led by Senator Elizabeth Warren. The move, which took place on April 7, has raised concerns about the impact on efforts to combat criminal activity linked to digital assets.
The NCET was established to target criminal activity in the digital asset sector, bringing together experts from various DOJ divisions specializing in cybercrime and money laundering. The unit was responsible for leading high-profile crackdowns, including actions against Tornado Cash and cybercriminals associated with North Korea.
Deputy Attorney General Todd Blanche defended the decision, stating that it allows the DOJ to shift its focus towards individual offenders rather than viewing the entire crypto industry as a threat. He emphasized that the agency is not a financial regulator and aims to avoid broad enforcement tactics.
New guidance from the DOJ reportedly advises less scrutiny on crypto exchanges, wallets, and mixers unless directly linked to criminal behavior. The focus is now on targeted prosecutions rather than broad investigations.
However, US lawmakers argue that dismantling the NCET poses significant risks. They believe that the task force played a crucial role in assisting local and state authorities in tackling complex crypto crimes, especially those lacking resources or expertise.
Lawmakers warn that without federal support, enforcement against threats like sanctions evasion, drug trafficking, and online scams could significantly weaken. They point to FBI data showing a 45% surge in crypto fraud to $5.6 billion in 2023 as evidence of the need for a specialized federal unit to hold bad actors accountable.
In a letter to the DOJ, lawmakers called for a reversal of the decision, labeling it a misguided shift that undermines crime prevention efforts. They also requested a detailed staff briefing by May 1, 2025, to explain the rationale behind the change.
The lawmakers raised concerns about potential political motivations behind the decision, questioning whether President Donald Trump’s involvement in various crypto projects influenced the move. They expressed worries that the decision to dismantle the NCET may be linked to easing law enforcement scrutiny due to the President’s interest in selling his cryptocurrency.
In conclusion, the decision to disband the NCET has sparked a heated debate among US lawmakers, with concerns raised about the impact on efforts to combat criminal activity in the digital asset sector. The fate of cryptocurrency enforcement efforts in the US remains uncertain as the DOJ faces mounting pressure to reverse its decision.