U.S. DOJ Disbands Crypto Enforcement Team, Shifts Focus to Scammers Targeting Investors

The U.S. Department of Justice (DOJ) has formally disbanded its National Crypto Enforcement Team (NCET).

In a four-page internal memo issued Monday evening, Deputy Attorney General Todd Blanche notified DOJ staff that the unit, once tasked with spearheading high-profile crypto-related investigations, had been dissolved effective immediately.

The move, as outlined in the memo obtained by Fortune, aligns with President Donald Trump’s January executive order to clarify regulatory frameworks surrounding digital assets and reverse what his administration calls the “regulation by prosecution” model pursued under President Joe Biden.

Blanche emphasized in the memo that the DOJ is not a regulatory body for digital assets and that the agency would henceforth prioritize cases involving individuals who directly defraud or victimize investors rather than entities such as exchanges, mixers like Tornado Cash, or providers of self-custodial wallets.

The decision, widely seen as a continuation of Trump’s increasingly pro-crypto posture, follows his broader executive directives to unwind civil enforcement efforts at agencies like the SEC and CFTC.

DOJ and SEC Pull Back from Enforcement-Driven Strategy

The DOJ’s NCET, launched in 2021 during the Biden administration, had been a powerful force in the crypto space.

It was responsible for several landmark actions, including the investigation of crypto mixer Tornado Cash and efforts to track illicit crypto flows linked to North Korean cyber operations.

Now, the abrupt closure of NCET has sparked debate over continued oversight in crypto.

But the DOJ is not acting in isolation. The Securities and Exchange Commission (SEC) has also begun scaling back its crypto enforcement activities.

In February, the SEC announced internal restructuring that reassigned dozens of lawyers and staff from its crypto-focused division to other departments, signaling a pivot in its priorities.

According to the report, many within the agency interpreted the move as a demotion, though SEC officials publicly framed it as a rebalancing of resources.

Commissioner Hester Peirce, a longtime advocate for clear, rules-based crypto regulation, is spearheading this change at the SEC.

In a February interview with Bloomberg, Peirce criticized the SEC’s historical reliance on enforcement actions as a proxy for regulatory clarity, particularly under the leadership of former Chair Gary Gensler.

Peirce confirmed that the agency is reassessing all existing crypto enforcement cases, including its high-profile lawsuit against Binance, which has been paused for 60 days.

“We have been using enforcement cases to set regulatory policy. We’re trying to shift that,” Peirce said.

The Crypto Task Force, led by Peirce, has been tasked with determining where the SEC’s jurisdiction over digital assets begins and ends.

Political Realignment and Legislative Push

Trump, who once derided Bitcoin, has now positioned himself as a “crypto president,” using pro-crypto rhetoric to court both industry leaders and digital-native voters.

In March, he signed an executive order authorizing the creation of a national reserve for Bitcoin and other digital assets.

Shortly thereafter, he hosted a summit with major crypto executives in Washington, D.C., reiterating his pledge to make the United States the global leader in digital finance.

“I promised to make America the Bitcoin superpower of the world and the crypto capital of the planet,” Trump declared at the summit.

Despite all these, critics of the Trump administration’s deregulatory push argue that without strong guardrails, the industry could once again become a hotbed for fraud and speculation.

Still, for now, the tide appears to be turning decisively in crypto’s favor. With the DOJ shifting away from institutional targets and the SEC exploring pragmatic regulatory pathways, the U.S. is entering a new era of digital asset oversight.

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