The Justice Department plans to dismantle a unit dedicated to enforcing cryptocurrency regulations just as President Donald Trump’s crypto venture raises hundreds of millions after stablecoin launch, according to a memo.
The National Cryptocurrency Enforcement Team “shall be disbanded effective immediately,” an April 7 memo from the office of Deputy Attorney General Todd Blanche 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,” the document, first reported by Fortune, says.
The move comes as the department works to comply with Trump’s January executive order aiming to protect the ability of citizens and private-sector entities to “access and use for lawful purposes open public blockchain networks without persecution” and provide “regulatory clarity.”
These new guidelines seek to end the “reckless strategy of regulation by prosecution, which was ill conceived and poorly executed” by the prior administration, the memo says. In October 2021, the Biden administration announced the creation of the National Cryptocurrency Enforcement Team to “tackle complex investigations and prosecutions of criminal misuses of cryptocurrency.”
This unit was involved with the investigation into Binance, the world’s largest cryptocurrency exchange, and its founder, Changpeng Zhao, who in 2023 pleaded guilty to failing to maintain an effective anti-money laundering platform.
Moving forward, the DOJ will no longer target “virtual currency exchanges, mixing and tumbling services, and offline wallets.” One example of what will no longer be targeted is Tornado Cash, a virtual currency mixer that facilitated more than $1 billion in money laundering transactions, the department said. Its founders were charged with money laundering in 2023.
The department’s crypto-related investigations will focus on prosecuting individuals who “victimize digital asset investors” or “use digital assets in furtherance of criminal offenses such as terrorism, narcotics and human trafficking, organized crime, hacking, and cartel and gang financing,” Blanche wrote.
The new directive comes one month after the president vowed to make the United States the “crypto capital of the world.”
World Liberty Financial, a cryptocurrency venture Trump helped launch last year, announced at the end of March that it plans to launch a stablecoin pegged to the U.S. dollar.
“We’re offering a digital dollar stablecoin that sovereign investors and major institutions can confidently integrate into their strategies for seamless, secure cross-border transactions,” Zach Witkoff, a World Liberty Financial co-founder, said in a statement at the time.
Since last October, World Liberty Financial raised $550 million after launching two tokens, according to a March release. The Trump family has a 75 percent claim of net revenues from token sales, Reuters previously reported.
The president and his sons each have roles in the venture; Trump is the venture’s “chief crypto advocate,” his youngest son Barron is the “DeFi visionary,” short for decentralized finance, while Donald Jr. and Eric are “web3 ambassadors,” the New York Times previously reported.
