DOJ Axes Crypto Oversight Team
The Justice Department has put an end to ‘regulation by prosecution' era by pulling back the enforcement team.
The US Department of Justice has disbanded its specialist cryptocurrency enforcement team — effectively waving the white flag in the regulatory war against digital assets.
The National Cryptocurrency Enforcement Team (NCET) — an initiative started under President Joe Biden that once struck fear among exchange executives — was officially shuttered on Monday after handling cases from Tornado Cash to Mango Markets.
"The Department of Justice is not a digital assets regulator," declared Deputy Attorney General Todd Blanche, Trump's former defence lawyer, in a memo titled "Ending Regulation by Prosecution".
NCET established in February 2022 was designed as crypto's answer to the FBI's organised crime unit. Staffed with elite prosecutors specialising in cybercrime, money laundering and asset forfeiture, it quickly became the industry's most feared adversary.
Its mandate? Nothing less than cleaning up the entire crypto ecosystem.
Prosecuting criminal misuse of digital assets
Targeting exchanges, mixers and infrastructure providers
Setting strategic priorities for the entire crypto enforcement landscape
Coordinating with global law enforcement and regulators
Training prosecutors nationwide on crypto crime
NCET's dissolution follows February's scaling back of the SEC's crypto enforcement unit, completing the regulatory relief package US President Donald Trump promised on the campaign trail when he vowed to make the nation "the crypto capital of the planet."
This policy change comes just days after the Treasury's lifting of sanctions on privacy protocol Tornado Cash, declaring smart contracts cannot be sanctioned as "property", a ruling that sent the protocol's governance token soaring more than 50%.
Resources previously dedicated to policing exchanges, mixers and wallet providers will now focus exclusively on terrorists, traffickers and serious criminals who happen to use crypto.
Will this create a lawless crypto landscape? Not exactly. Under the new directive, US attorney's offices will still handle crypto cases, but with a narrowed focus:
Terrorist financing operations
Dark web marketplaces selling illegal goods
Ransomware attacks demanding Bitcoin ransoms
Human trafficking facilitated through digital assets
What's missing?
The registration violations and unlicensed money transmission charges that were NCET's bread and butter — the cases that crypto advocates argued were stifling US innovation while sending companies fleeing to Dubai, Singapore and Switzerland.
Major financial hubs from London to Singapore have their own crypto enforcement frameworks that could be influenced by this policy pivot.
Not everyone's celebrating, of course. Democratic lawmakers have raised concerns, with Rep. Maxine Waters connecting the decision to Trump's personal cryptocurrency ventures.
For an industry long plagued by regulatory uncertainty, the dismantling of NCET represents either a dangerous abandonment of oversight or the dawn of a new innovation-friendly era – depending entirely on whom you ask.