In a sweeping shake-up that’s reverberating through the digital asset world, the U.S. Department of Justice has officially disbanded its National Cryptocurrency Enforcement Team, shifting focus away from prosecuting crypto platforms and toward individual bad actors exploiting the technology for fraud and crime.
In a bold Monday memo, Deputy Attorney General Todd Blanche told DOJ staffers the department would no longer act as a “shadow regulator” for cryptocurrency. The move aligns with President Donald Trump’s executive order urging federal agencies to foster innovation rather than impede it — and effectively ends what critics had dubbed “regulation by prosecution.”
DOJ Rewrites Its Crypto Playbook
“The Justice Department is not a digital assets regulator,” the memo stressed. With that declaration, the DOJ is halting enforcement efforts against crypto platforms — including exchanges, mixers, and wallets — unless they are directly complicit in illegal conduct. Instead, prosecutors are now being urged to zero in on scams, hacks, and misappropriation of customer funds.
“We’re going after the wolves, not the wool,” the memo implied, invoking a metaphor that suggests platforms — even flawed ones — aren’t the root predators in the crypto ecosystem.
The now-defunct National Cryptocurrency Enforcement Team (NCET), formed just two years ago to handle major crypto crimes, has been dismantled effective immediately. Similarly, the Market Integrity and Major Frauds Unit is withdrawing from crypto enforcement to reprioritize other economic crimes.
