The U.S. Department of Justice Dissolves Cryptocurrency Enforcement Team, Major Positive Developments for the Crypto Industry?
The U.S. Department of Justice (DOJ) has announced that they will no longer prosecute cryptocurrency exchanges, developers, or users for regulatory violations. This is big news and a significant victory for the cryptocurrency industry.
Recently, Deputy Attorney General Todd Blanche released a memorandum announcing the immediate dissolution of the former National Cryptocurrency Enforcement Team (NCET). This news was disclosed on the X platform by Amanda Tuminelli, Executive Director of the DeFi Education Fund, sparking widespread attention in the industry.
Blanche made it clear that the Department of Justice is not the regulatory body for digital assets and will no longer use criminal prosecution as a means to regulate digital assets. He also stated that the previous administration's prosecution strategy was overly reckless, failing to fully consider the consequences, leading to poor enforcement outcomes.
The memorandum indicates that the DOJ will no longer bring lawsuits or enforcement actions against cryptocurrency exchanges, mixing services, and end users of offline wallets, unless there is intentional wrongdoing involved. This shift marks a significant adjustment in the DOJ's regulatory strategy concerning digital assets.
Now, the DOJ will focus on prosecuting individuals who harm digital asset investors and engage in crimes such as terrorism, human trafficking, drug trafficking, and financial fraud using cryptocurrencies. At the same time, the DOJ has ordered the termination of ongoing investigations that are inconsistent with the new policy and is collaborating with criminal divisions to ensure consistency in enforcement actions.
The NCET had been involved in several major cryptocurrency cases, including the prosecution of the Ethereum mixing service Tornado Cash. In 2023, the DOJ arrested its platform developer Roman Storm on charges of money laundering and violations of sanctions, which sparked controversy.
Another case involves the Samourai wallet, a privacy-focused Bitcoin wallet. Although this product is a non-custodial service and does not control user funds, its mixing function has been viewed by legislators as a means to obscure illegal trading purposes.
This is not the first action taken by the current government department; as early as January this year, Trump signed an executive order that led the Commodity Futures Trading Commission (CFTC) to reduce its existing cryptocurrency enforcement team. Currently, only the CFTC and SEC are responsible for handling matters related to digital assets.
