US Justice Dept disbands crypto team, shifts focus to major crimes

The US Department of Justice (DOJ) announced the disbandment of its National Cryptocurrency Enforcement Team (NCET) and a change in focus for cryptocurrency-related investigations.

This decision was detailed in a memo from Deputy Attorney General Todd Blanche on Apr. 7, 2025 night.

The NCET was established in February 2022 to address fraud and illicit activities in the digital asset sector. It was involved in notable cases, including the investigation of Binance and its founder, Changpeng Zhao, who pleaded guilty to anti-money laundering violations.

The DOJ will now prioritize cases involving individuals using digital assets for terrorism, drug trafficking, organized crime, and hacking.

Blanche instructed prosecutors to close ongoing investigations that do not align with this new focus.

He indicated that charges for regulatory violations under federal banking, securities, and commodities laws will only be pursued if there is evidence of willful wrongdoing.

The memo also specified that the DOJ will stop targeting services such as cryptocurrency exchanges, offline wallets, and mixers for actions taken by their end users or unintended regulatory breaches.

This directive aligns with a broader shift in government policy under President Donald Trump’s administration, which has advocated for easing cryptocurrency regulations.

🔗 Source: Reuters

🧠 Food for thought

1️⃣ Historic regulatory patchwork creates enforcement challenges

The DOJ’s policy shift on crypto reflects the ongoing fragmentation of US digital asset regulation that has existed for years.

Different agencies have been treating cryptocurrencies in contradictory ways. The IRS approaches crypto as property, while FinCEN regulates crypto businesses as money transmitters, and the CFTC considers them commodities 1.

This regulatory overlap was first formalized in 2011 when FinCEN updated the definition of Money Services Businesses to include virtual currencies, mandating AML compliance despite uncertainty about broader legal classifications 2.

The absence of coherent cross-agency frameworks has led to enforcement conflicts, with the first major cryptocurrency enforcement action occurring in 2015 when Ripple Labs was fined $700,000 for failing to register as a money services business 2.

This patchwork creates significant compliance challenges for legitimate crypto businesses who must simultaneously satisfy multiple, sometimes contradictory regulatory requirements.