We have written about some of the significant changes under the new Trump administration with respect to cryptocurrency. See here. There was another seismic shift on April 7, 2025 with the memorandum that Deputy Attorney General Todd Blanche wrote to all employees of the United States Department of Justice (DOJ) which, among other things, “effective immediately,” disbanded the National Cryptocurrency Enforcement Team (NCET) and took other steps to implement President’s Trump statement that “[w]e are going to end the regulatory weaponization against digital assets.” Blanche is one of several Trump criminal defense lawyers at the top ranks of DOJ.
The NCET was established in 2021 as part of DOJ’s criminal division to address the challenge posed by the criminal misuse of cryptocurrencies and digital assets. The team was comprised of attorneys from across the Department, including prosecutors with backgrounds in cryptocurrency, cybercrime, money laundering and forfeiture. Working in close collaboration with components across the DOJ, according to the DOJ website, NCET worked to identify, investigate, support and pursue the department’s cases involving the criminal use of digital assets, with a particular focus on virtual currency exchanges, mixing and tumbling services, infrastructure providers, and other entities that enabled the misuse of cryptocurrency and related technologies to commit or facilitate criminal activity, and individuals who use these technologies to defraud the public.
The memo explained that the reason behind the changes was that DOJ is not a digital assets regulator, but the Biden Administration used the Department to pursue a “reckless strategy” of regulation by prosecution that Blanche said was ill-conceived and poorly executed. “Regulation by prosecution” was one of the most oft-heard complaints by the cryptocurrency industry of the SEC under former chairman Gary Gensler (who resigned on the day President Trump was inaugurated). The memo further states:
The Justice Department will no longer pursue litigation or enforcement actions that have the effect of superimposing regulatory frameworks on digital assets while President Trump’s actual regulators do this work outside the punitive criminal justice framework.
More specifically, DOJ “will no longer target virtual currency exchanges, mixing and tumbling services, and offline wallets for the acts of their end users or unwitting violations of regulations.” Instead, the Department will “prioritize investigations and prosecutions that involve conduct victimizing investors, including embezzlement and misappropriation of customers’ funds on exchanges, digital asset investment scams, fake digital asset development projects such as rug pulls, hacking of exchanges and decentralized autonomous organizations resulting in the theft of funds, and exploiting vulnerabilities in smart contracts.”
In a section of the memo relating to “charging considerations,” prosecutors were directed not to charge regulatory violations involving digital assets “unless there is evidence that the defendant knew of the licensing or registration requirement at issue and violated such a requirement willfully.” The memo acknowledged that this priority was not required by law but was being imposed as a matter of discretion. It also included the following:
Prosecutors should not charge violations of the Securities Act of 1933, the Securities Exchange Act of 1934, the Commodity Exchange Act, or the regulations promulgated pursuant to these Acts, in cases where (a) the charge would require the Justice Department to litigate whether a digital asset is a “security” or “commodity,” and (b) there is an adequate alternative criminal charge available, such as mail or wire fraud.
Consistent with the above objectives, the memo also announced that the Market Integrity and Major Frauds Unit will stop crypto enforcement work to focus on other priorities.
Shutting the NCET is consistent with the other regulatory steps by the Trump administration to carry out a broader policy shift seeking greater regulatory clarity in the digital assets sector. See here. Trump has also adopted explicitly pro-crypto policies. This includes a March 2025 executive order to establish a Strategic Bitcoin Reserve and a U.S. Digital Asset Stockpile, aimed at positioning the United States as a leader among nations in government digital asset strategy.
