Trump Administration Eases Cryptocurrency Enforcement Regulations
By Katherine Faulders, Alexander Mallin, and Aaron Katersky
April 8, 2025
In a significant policy shift, the Trump administration announced a relaxation of enforcement actions against cryptocurrency activities, following a memo from Deputy Attorney General Todd Blanche. This directive marks the disbanding of the National Cryptocurrency Enforcement Team (NCET), which had been responsible for prosecuting violations related to digital assets.
New Direction in Crypto Enforcement
The Justice Department’s memo, which was reviewed by ABC News, explicitly instructs federal prosecutors to cease targeting virtual currency exchanges, as well as mixing and tumbling services and offline wallets, for actions taken by end users or unintentional regulatory violations. The memo emphasized that "the Department of Justice is not a digital assets regulator."
This shift is in line with President Donald Trump’s broader pro-cryptocurrency agenda. Previously, he had directed regulatory bodies such as the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) to adopt a more lenient stance on crypto regulations, further highlighting the administration’s focus on fostering growth within the digital asset sector.
Critique of the Biden Administration
In the memo, Blanche criticized the approach taken by the Biden administration, suggesting that it pursued a "reckless strategy of regulation by prosecution." He indicated that the previous administration’s investigations into the crypto industry would now focus on serious offenses, targeting individuals who commit fraud against digital asset investors or those who use cryptocurrencies to facilitate serious crimes, including terrorism and organized crime.
The decision to ease regulatory pressure means that significant cases previously pursued under the earlier administration will likely be deprioritized. High-profile prosecutions such as that of Tornado Cash, which allegedly laundered over $1 billion, and Avraham Eisenberg, convicted for a $110 million market manipulation scheme, might see no further action.
Implications for Victims of Crypto Fraud
Blanche further examined the implications of current enforcement standards on victims of financial fraud within the cryptocurrency sphere. He noted that many investors have faced losses calculated based on the digital assets’ value at the time of fraud, rather than when the market subsequently recovered. This approach, he argued, unfairly penalizes victims who have not been able to regain their losses due to shifts in the market.
The memo also referenced the troubled prosecution of Sam Bankman-Fried, who has been accused of overseeing one of the largest financial frauds in American history. Blanche emphasized the need for adjustments in prosecutorial strategy to better serve victims of crypto fraud.
Response from the U.S. Attorney’s Office
Despite the sweeping changes proposed in the memo, a spokesperson for the U.S. Attorney’s Office in Manhattan declined to comment on how these changes might affect ongoing cases.
Conclusion
The Trump administration’s move to ease cryptocurrency enforcement reflects a significant ideological pivot in U.S. policy towards digital assets. As cryptocurrency continues to evolve and attract more mainstream attention, stakeholders in the industry are observing how this shift will shape the future of regulatory practices and investor protections in the realm of digital currencies.
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