Trump Administration Eases Cryptocurrency Enforcement in Major Policy Shift
April 8, 2025
By Katherine Faulders, Alexander Mallin, and Aaron Katersky
The Trump administration has announced a significant retreat from its previous enforcement of cryptocurrency regulations, signaling a new approach to digital assets. This move comes as part of an ongoing trend of Trump aligning himself with cryptocurrency advocates, both during and after his presidency.
Disbanding the National Cryptocurrency Enforcement Team
In a memo circulating within the Justice Department, Deputy Attorney General Todd Blanche instructed federal prosecutors to dial back on prosecuting cases involving virtual currency exchanges, mixing and tumbling services, and offline wallets. Crucially, Blanche noted that "the Department of Justice is not a digital assets regulator," and announced the immediate disbandment of the National Cryptocurrency Enforcement Team (NCET).
This shift marks a stark contrast to the previous administration’s aggressive regulatory approach toward cryptocurrency, which sought to pursue enforcement against various actors within the industry. The memo criticized the Biden administration for what Blanche termed a "reckless strategy of regulation by prosecution."
Focus on Serious Crimes
While the latest directive represents a relaxation of enforcement policies, Blanche emphasized that investigations would remain focused on serious offenses. He stated that prosecutions would prioritize individuals who engage in fraudulent activities that victimize digital asset investors or use digital currencies to facilitate criminal acts—such as terrorism, drug trafficking, and organized crime.
Criticism of Previous Prosecutions
The memo’s content suggests a significant departure from major crypto-related cases pursued under the prior administration. This includes high-profile prosecutions such as Tornado Cash, which allegedly laundered over $1 billion, and Avraham Eisenberg, who was convicted of market manipulation linked to $110 million. This new stance raises questions about the future of these ongoing investigations.
Blanche also criticized the handling of the Sam Bankman-Fried case, who has been accused of orchestrating "one of the biggest financial frauds in American history." Blanche articulated concerns that the methods employed by prosecutors resulted in inadequate investor recoveries, with losses calculated at lower asset values that do not reflect the current market conditions.
A Broader Strategy?
This shift in enforcement policy appears consistent with Trump’s broader pro-crypto stance. Notably, prior directives had already encouraged the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) to ease their approach to cryptocurrency regulations. Furthermore, the Trump administration has also floated the idea of creating a digital assets reserve.
As the administration moves forward with these changes, stakeholders within the cryptocurrency industry are watching closely, as the newfound leniency could shape the future of digital asset regulation in the United States.
Conclusion
The Trump administration’s decision to ease up on cryptocurrency enforcement marks a substantial shift in policy that could have lasting implications for the industry. As investigations are restructured and focus is redirected, the balance between consumer protection and industry growth remains a pivotal issue for regulators and advocates alike.
For ongoing updates and insights into cryptocurrency and other developments affecting the financial landscape, stay tuned to ABC News.
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