U.S. Justice Department disbands cryptocurrency enforcement team

The U.S. Department of Justice notified employees late Monday that it would officially disband its unit dedicated to cryptocurrency-related investigations. According to a four-page memo obtained by Fortune, Deputy Attorney General Todd Blanche announced the decision, noting: “The Department of Justice is not a regulator for digital assets. However, the previous administration used the Department of Justice to pursue a reckless strategy of ‘regulating through prosecution.’”

Branch is the No. 2 official at the Justice Department and is serving as President Donald Trump's defense attorney in his 2024 criminal trial. He wrote in the memo that the National Cryptocurrency Enforcement Team (NCET) was "disbanded immediately," a move that was in line with Trump's January executive order on digital assets, which aimed to "establish a clear regulatory framework" for the crypto industry.

NCET was established during the Biden administration in 2021 and is a joint task force composed of prosecutors from the Justice Department’s Anti-Money Laundering and Cybercrime Section and members of other local law offices. The team has been involved in several high-profile crypto investigations, including the cryptocurrency mixing platform Tornado Cash, which obfuscates the source of funds to hide the identity of users, and the case in which hacker Avraham Eisenberg exploited a trading protocol vulnerability to steal more than $100 million. NCET also led investigations into North Korean hackers who assisted in money laundering.

In the memo, Branch directed DOJ employees to focus on “prosecuting individuals who prey on digital asset investors” and move away from bringing cases against cryptocurrency exchanges, mixing platforms like Tornado Cash, and technical targets such as “offline wallets.”

The disbanding of the cryptocurrency enforcement team marks another major "relaxation" move by the Trump administration on digital asset regulation. Previously, the government had issued instructions to civil regulators such as the U.S. Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) to relax the regulation of cryptocurrencies.

In addition, Trump has also made it clear that he supports cryptocurrencies in terms of policy. In March of this year, he issued an executive order authorizing the establishment of a "strategic bitcoin and digital asset reserve." A few days later, he invited a group of cryptocurrency industry executives to Washington for a public meeting to discuss legislative priorities and held a symbolic photo.