On April 8, the U.S. Justice Department’s Deputy Attorney General Todd Blanche suddenly shut down the National Cryptocurrency Enforcement Team.
The abrupt shutdown throws a wrench into current prosecutorial actions.
Prosecutors have been instructed to close ongoing investigations that do not align with the new priorities, according to the memo.
The DOJ also explicitly states it will not pursue enforcement against crypto exchanges, mixing and tumbling services, or offline wallets for the actions of their users or “unwitting violations of regulations” — marking a major departure from prior policy. Prosecutors are instructed not to charge violations of financial laws, such as unlicensed money transmission and unregistered securities offerings unless they can prove the defendant knew of the rules and willfully broke them.
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Complimenting this favor to cryptocurrency criminals, the Market Integrity and Major Frauds Unit has been ordered to suspend “all cryptocurrency enforcement efforts.”
Though the administration has used a bureaucratic justification to cease the Justice Department’s enforcement against cryptocurrency-related crime, arguing that criminal enforcement has become a tool for financial regulation, the real reason for this shift can be found in Trump’s personal interests as they relate to cryptocurrency.
Trump and his family have branched out into multiple crypto projects in the past year. One is a yet-to-be-launched, decentralized digital bank called World Liberty Financial, which has already sold $550 million in tokens. That venture sends 75% of profits to Trump-linked entities. The family also makes money from the Trump- and Melania-branded meme coins.
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The memo redirected the Justice Department to handle cases involving cryptocurrency only when they relate to “terrorism, narcotics and human trafficking, organized crime, hacking, and cartel and gang financing” as well as injuries incurred on digital asset investors. U.S. attorney’s offices are to adopt a prominent role in prosecuting digital asset crime.
