The U.S. Department of Justice has disbanded its National Cryptocurrency Enforcement Team, retrenching its approach to crypto.
The Justice Department will move away from going after crypto cases it believes should be handled by regulatory agencies, Deputy Attorney General Todd Blanche said in a memo released Monday night.
"The Department of Justice is not a digital assets regulator," the memo read. "However, the prior administration used the Justice Department to pursue a reckless strategy of regulation by prosecution, which was ill-conceived and poorly executed."
The shuttering of the crypto enforcement team is "effective immediately," according to the memo.
"The department will no longer target virtual currency exchanges, mixing and tumbling services and offline wallets for the acts of their end users or unwitting violations of regulations — except to the extent the investigation is consistent with the [administration's] priorities," the memo read.
Blanche's memo stated the Justice Department will no longer pursue cases of unintentional violations of the Bank Secrecy Act. Instead, the Justice Department will focus on cases where investors are being defrauded like cases of exchanges stealing or misappropriating funds, hacks of exchanges and digital asset scams.
The SEC dropped a case against cryptocurrency exchange Kraken in March in the latest of a string of dismissals. In the original lawsuit filed in November 2023, Kraken was accused of operating as an unregistered securities exchange, broker, dealer and clearing agency.
The SEC in February dismissed or paused at least nine cases against crypto companies, including ones against the largest players like Coinbase and Binance.
President Donald Trump ran partially on a promise to ease regulations for the industry. At a bitcoin conference in Nashville in July, Trump chided Biden-era SEC Chair Gary Gensler to cheers from attendees. The now-president vowed to make the United States "the crypto capital of the planet" in his conference speech.
Bolstered by large contributions from crypto enthusiasts in the 2024 campaign, Trump went from calling the digital asset a "scam" in his first term to making it a priority of his administration in his second. A report from the nonprofit watchdog group Public Citizen found nearly half of all corporate funds donated in the 2024 election were from crypto companies — about $135 million. Coinbase and Ripple alone accounted for more than 80% of the donations.
The president has wholeheartedly endorsed digital assets. Even before beginning his second term, Trump vowed to be the first "crypto president." He launched his own meme coin, $TRUMP, hours before his swearing in.
Upon taking office, the president appointed several crypto enthusiasts to key positions. He selected Hester Peirce, known as "crypto mom" for her embrace of the industry, to head the SEC cryptocurrency task force. The SEC commissioner has been a critic of the agency's use of "regulation by enforcement" on crypto issues.
Trump chose venture capitalist David Sacks to lead a digital asset working group he formed through executive order his first week in office. The order outlined rules for the development and use of cryptocurrencies in the U.S.
The Consumer Financial Protection Bureau said it will not enforce or supervise nonbank financial firms that miss upcoming compliance deadlines for the nonbank registry of repeat offenders.
A bill being introduced by Sen. Catherine Cortez Masto, D-Nev., would compel the Federal Home Loan Bank System to contribute 30%, or a minimum of $200 million, of each bank's net earnings into affordable housing or other community development programs.
The chief executives at four of the nation's largest banks weighed in on what evolving trade policies mean for their businesses and the U.S. economy. "I think you have to be a little bit pessimistic here," said Bank of New York Mellon CEO Robin Vince.
