The U.S. Department of Justice (DOJ) has decided to disband its National Cryptocurrency Enforcement Team (NCET), a significant shift in its approach to regulating the cryptocurrency industry. Launched in 2022 under the Biden administration, the NCET played a central role in prosecuting crypto-related crimes, including the historic $4.3 billion settlement case against Binance and CEO Changpeng Zhao.
In an internal memo sent on April 7, Deputy Attorney General Todd Blanche announced the closure of the unit and detailed that ongoing investigations not meeting newly defined criteria would be halted. The DOJ’s new stance will focus on cryptocurrency crimes involving terrorism, human trafficking, narcotics trafficking, organized crime, and hacking. The memo also directed prosecutors to cease actions against crypto exchanges, wallet providers, and services like Tornado Cash for regulatory violations or actions made in error by users.
Blanche criticized the Biden administration’s approach to crypto as “regulation by prosecution,” calling it reckless. The decision to scale back enforcement efforts follows a recent executive order issued during the Trump administration, which upholds the freedom to access open blockchain networks without fear of retaliation. Trump, who has personal ties to the crypto industry through World Liberty Financial, has long been seen as a crypto-friendly figure, especially after courting the sector aggressively during his pre-election campaign.
The new directives from Blanche also include instructions to avoid pursuing violations of securities, banking, or commodities laws unless clear evidence of willful misconduct is present. This move marks a stark contrast to the proactive stance taken during the Biden administration.
However, not all in the crypto community are in favor of this policy shift. Critics argue that reducing the DOJ’s involvement in crypto enforcement may lead to an increase in fraud, scams, and other criminal activity. There are concerns that a more hands-off approach could allow malicious actors to thrive without fear of repercussions.
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