- DOJ disbands NCET, shifting strategy to only prosecute bad actors targeting digital asset investors, not crypto platforms or tools.
- Exchanges, mixers like Tornado Cash, and wallets are no longer enforcement targets, per the new DOJ internal memo.
- The move follows Trump’s crypto executive order, aiming to reset digital asset policy with a clear, innovation-friendly enforcement strategy.
The U.S. Department of Justice notified its employees on Monday night that a dedicated crypto investigation unit would be disbanded. The move follows a memo that redirects enforcement focus toward prosecuting individuals targeting digital asset investors. The change aligns with a shift in federal enforcement practices for digital assets.
DOJ Crypto Unit Dismantled
A four-page memo, as reviewed by Fortune, announced that the National Cryptocurrency Enforcement Unit is dissolved effective immediately. U.S. Deputy Attorney General Todd Blanche communicated the decision in the memo. The memo explained that the department is not meant to serve as a digital assets regulator. It stated that past strategies pursued aggressive regulation by the prosecution.
The unit was established in 2021 under President Biden. It combined prosecutors from money laundering and cybercrime divisions with attorneys from various district offices. This task force handled major cryptocurrency cases. It coordinated investigations into Tornado Cash, a mixer that obscured crypto fund origins.
The unit also examined the case of Avraham Eisenberg, who exploited a crypto trading protocol for over $100 million. Investigations included actions against North Korean actors involved in laundering proceeds from crypto hacks. The memo insists that employees focus on prosecuting fraud that harms digital asset investors. Authorities will no longer pursue cases against exchanges, mixing services, or offline wallets.
Enforcement Focus and Memo Directives
The memo directs DOJ employees to concentrate on actions against individuals who victimize digital asset investors. It instructs staff not to target cryptocurrency exchanges or mixers such as Tornado Cash. This operational change follows directives from Trump’s January executive order on digital assets. The order aimed to establish regulatory clarity for the industry.
Deputy Attorney General Todd Blanche stressed that the new focus would eliminate a broader enforcement approach. This realignment reflects concerns about previous strategies that extended enforcement to crypto service providers. The memo emphasizes prosecuting clear cases of investor fraud and abuse. The decision shifts resources toward addressing criminal actions with direct investor harm.
The directive moves away from broad regulatory measures used by previous administrations. It narrows the scope of investigations to protect those who hold digital assets. Enforcement will now target specific fraudulent activities rather than pursuing regulatory actions against crypto service providers. Staff have been instructed to review their case portfolios accordingly.
Regulatory Shifts and Pro-Crypto Policies
The disbandment of NCET is part of a regulatory pullback from aggressive digital asset enforcement. Other federal agencies, such as the SEC and CFTC, received similar guidance to ease crypto regulations. These steps indicate a broader approach to digital asset oversight. The move reflects a shift away from previous enforcement strategies.
Recent measures by the Trump administration support pro-crypto policies through updated directives. A March executive order authorized a strategic Bitcoin and digital assets reserve. Crypto executives were recently invited to Washington, D.C. to discuss legislative priorities. Federal policy now concentrates on investor protection without extensive regulation of exchanges or mixers.
The reorientation of DOJ enforcement resources is expected to influence future digital asset investigations. The strategic shift concentrates efforts on clear-cut cases of investor fraud. The department continues to adjust its focus in line with evolving federal policies.
