The US justice department is disbanding a unit that was dedicated to investigating cryptocurrency-related fraud as Donald Trump’s presidential administration loosens oversight in the digital assets sector.
In a four-page memo sent to justice department employees on Monday evening, the deputy attorney general, Todd Blanche, said that its national cryptocurrency enforcement team (NCET) “shall be disbanded effective immediately”.
The memo from Blanche, who previously represented the president in the 2024 criminal trial that led to Trump’s conviction on 34 felony charges of falsifying business records, said that “the digital assets industry is critical to the nation’s economic development and innovation”.
“The department of justice is not a digital assets regulator,” Blanche said. He then went on to criticize Trump’s presidential predecessor Joe Biden, saying: “However, the prior administration used the justice department to pursue a reckless strategy of regulation by prosecution.”
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”, Blanche wrote.
Rather, Blanche said, the department’s “investigations and prosecutions involving digital assets shall focus on prosecuting individuals who victimize digital asset investors, or those who use digital assets in furtherance of criminal offenses such as terrorism, narcotics and human trafficking, organized crime, hacking, and cartel and gang financing”.
The decision to dissolve NCET, Blanche wrote, was part of the justice department’s efforts to comply with an executive order signed by Trump at the start of his second presidency in January.
The executive order calls for the government to protect and promote “the ability of individual citizens and private-sector entities alike to access and use for lawful purposes open public blockchain networks without persecution”, among other objectives.
Justice department officials, Blanche wrote, “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”, among other instructions.
Ongoing investigations that are “inconsistent” with this new policy “should be closed”, Blanche added.
A justice department spokesperson did not immediately respond to a request for comment from the Guardian on Tuesday.
According to the justice department’s website, NCET was established under Biden to “address the challenge posed by the criminal misuse of cryptocurrencies and digital assets”.
Composed of attorneys with expertise in cryptocurrency, cybercrime and money laundering, the team was tasked with spearheading several high-profile crypto-related cases.
The decision to disband the unit comes as Trump has expressed a desire to make the US the “crypto capital of the planet”. And he has advocated for easing regulations on the digital asset industry while also adopting pro-crypto policies.
During his campaign for the White House last year, Trump wooed crypto companies to contribute to his campaign and to support his candidacy.
Last autumn, it was announced that Trump and his sons were helping launch a new crypto venture called World Liberty Financial. And ahead of his inauguration, Trump launched a crypto token.
According to Reuters, the Trump family has a claim on 75% of the net revenues from token sales by World Liberty Financial.
Trump in March signed an executive order creating a strategic reserve of cryptocurrency for the US. And that same week, he hosted leaders from the crypto industry to the White House for a round-table discussion.
