Washington D.C. – The Department of Justice has abruptly shuttered its dedicated crypto litigation division, the National Cryptocurrency Enforcement Team (NCET), a move Deputy Attorney General Todd Blanche characterized as a correction to what he called a “reckless strategy” pursued under the Biden administration. It’s a shift, to put it mildly. The DOJ, it seems, is rethinking its approach to policing the blockchain.
- The Department of Justice is closing its crypto litigation division, signaling a change in strategy from broad enforcement to targeting individual criminals. This shift comes as the DOJ reevaluates its approach to regulating the crypto space.
- The SEC is also scaling back its crypto enforcement efforts, with key personnel reassigned, suggesting a broader softening of the regulatory stance towards digital assets. This shift coincides with a pro-crypto stance from Donald Trump, who aims to establish the U.S. as a global crypto capital.
- The focus is shifting towards targeting individual bad actors like scammers and hackers, aiming for a more realistic and targeted approach to crypto regulation. The goal is to foster innovation and attract investment while addressing criminal activities within the crypto landscape.
Blanche’s memo, issued Monday, argues the Justice Department overstepped its bounds by aggressively pursuing enforcement actions against crypto companies. The new directive prioritizes targeting individual criminals exploiting the crypto space, rather than attempting to regulate the industry itself. Think less sweeping crackdowns, more focused manhunts. It’s a bit like switching from trying to drain the swamp to catching the alligators.
From Strike Team to Individual Actors
NCET, formed in 2021, wasn’t messing around. The team tackled high-profile cases like the crypto mixer Tornado Cash and the $100 million Mango Markets exploit, where Avraham Eisenberg was ultimately convicted of fraud. Though, things got a little messy with Tornado Cash – the Treasury Department recently lifted sanctions following a court ruling. It’s a reminder that even the most determined legal strikes can be…complicated. The team’s work, while ambitious, is now deemed excessive.
This isn’t happening in a vacuum. The Securities and Exchange Commission is also scaling back its crypto enforcement unit, reassigned its top digital asset litigator to IT. Jorge Tenreiro, the SEC’s digital asset point man, is now focused on keeping the computers running. It’s a demotion, sure, but someone has to make sure the servers don’t crash. It all points to a broader change in course, a softening of the regulatory stance.
The timing is…convenient. Donald Trump, who’s made no secret of his pro-crypto leanings, is back in the White House. During his campaign, he promised to turn the U.S. into a “global crypto capital.” He’s already signed an executive order to establish a Bitcoin reserve – essentially a digital Fort Knox – and is pushing for clear digital asset market rules. Two stablecoin bills are making their way through Congress, potentially landing on his desk by the end of June. It’s a pretty dramatic turnaround, isn’t it?
But let’s be real, regulation is always a bit of a mess. It’s like trying to herd cats, only the cats have code and can move money across borders in seconds. The shift towards focusing on individual bad actors feels…sensible. Go after the scammers, the hackers, the ones actively ripping people off. That’s a fight everyone can get behind. It’s a more targeted approach, and frankly, a more realistic one.
The question now is, will this new approach actually work? Will it foster innovation and attract investment, as Trump hopes? Or will it simply create a more permissive environment for criminals? Only time will tell. But one thing is certain: the crypto landscape is shifting, and it’s shifting fast. And if you thought you understood it yesterday, well, you probably don’t today.
