The U.S. Department of Justice (DOJ) is restructuring its approach to cryptocurrency enforcement by disbanding its dedicated crypto unit and refocusing efforts on prosecuting individuals who exploit digital assets to harm investors or commit other crimes. This move, announced in a department-wide memo, marks a significant policy shift away from targeting crypto platforms and towards pursuing individual accountability.

In a memo issued Monday, Deputy Attorney General Todd Blanche explained that the DOJ is stepping back from “regulation by prosecution” in the digital asset space. The department will instead align its strategy with President Donald Trump’s executive order on digital asset innovation, which emphasizes fostering responsible growth in the sector. The DOJ, Blanche wrote, “is not a digital assets regulator.”

“The Justice Department will no longer bring actions that effectively impose regulatory frameworks through criminal prosecutions while President Trump’s regulatory agencies take the lead,” the memo stated.

Immediate Disbanding of Crypto Task Force

As part of this change, the DOJ’s National Cryptocurrency Enforcement Team (NCET) has been disbanded effective immediately. The Market Integrity and Major Frauds Unit will also cease crypto-related enforcement to focus on other areas. In their place, the Computer Crime and Intellectual Property Section (CCIPS) will provide training and act as a bridge between the DOJ and the digital asset industry.

The DOJ will now concentrate on cases involving scams, fraud, misappropriation of customer funds, and "rug pulls"—schemes where crypto developers abandon projects after collecting investor money. These crimes, the memo notes, have direct victims and can lead to asset recovery, helping build trust in the crypto ecosystem.

Focus on Investor Protection, Not Platforms

Prosecutors will still pursue criminal organizations and terrorist groups using cryptocurrency to fund illegal operations. However, they will no longer target platforms such as crypto exchanges, mixers, tumblers, or offline wallets simply because these were used in unlawful activity. Enforcement will now depend on whether the case aligns with the DOJ’s new priorities.

“The department will not pursue actions against platforms used by bad actors unless the platform itself was complicit or the case aligns with DOJ’s outlined priorities,” the memo said.

Limits on Charging Regulatory Violations

Blanche’s memo also advised against bringing charges based solely on regulatory violations—such as unlicensed money transmission or securities registration failures—unless there is evidence of willful misconduct. Prosecutors are encouraged to avoid legal battles over whether a particular digital asset qualifies as a security or a commodity when more straightforward charges, like wire fraud, are applicable.

That said, the DOJ may still argue that Bitcoin and Ether are commodities, and pursue securities fraud charges where crypto tokens represent equity in a firm.

Legislative and Policy Changes on the Horizon

The DOJ is also looking to improve legal protections for victims of crypto-related crimes. Specifically, it aims to ensure that victims can recover assets at their increased value, not just their worth at the time of the crime—an issue that’s arisen in bankruptcy proceedings.

Additionally, the DOJ will make regulatory and legislative recommendations as part of the working group established by the executive order on digital assets.

The DOJ did not comment further on the memo or on how these policy changes will affect current legal actions, such as the ongoing case against Roman Storm, the alleged operator of the crypto mixer Tornado Cash.