“Not a Regulator” - Trump Admin Changes DOJ Crypto Strategy
Crypto fraudsters are no longer the priority of the Department of Justice (DOJ), as the Trump Administration narrows its cryptocurrency enforcement strategy.
DOJ disbanded the National Cryptocurrency Enforcement Team effective immediately and will no longer take on complicated enforcement efforts involving banking and securities law.
Instead, the focus will be on prosecuting criminals who take advantage of crypto investors and taking on criminals who use crypto to further criminal offenses like terrorism, drug trafficking, human trafficking, gang financing, and more.
In a memo, Deputy Attorney General Todd Blanche said this moves DOJ away from the Biden’s Administration “reckless strategy of regulation by prosecution, which was ill conceived and poorly executed.” The memo noted that DOJ “is not a digital assets regulator.”
The move also brings DOJ in line with President Trump’s earlier executive order on cryptocurrency, which seeks to make the U.S. the “crypto capital of the planet.”
It’s also the latest effort by the Trump Administration to scale back enforcement of white-collar crimes to focus more on enforcement of illegal immigration, gangs, drugs, and other crimes.
In fact, the Market Integrity and Major Frauds Unit is also being pivoted away from crypto crimes to focus on those other priorities.
Mixed Reactions
Cryptocurrency companies and investors hailed the move, including the crypto advocacy group Coin Center.
Some were concerned that the Biden Administration was using the regulations to unfairly target developers.
“We should be going after bad guys. Not the developers of good tools that bad guys happen to use,” said Coin Center Executive Director Peter Van Valkenburgh.
But others are concerned this opens the doors for bad actors.
"Dangerous US adversaries rely on cryptocurrencies to launder money and evade sanctions," said Nate Sibley, an anti-corruption expert and director of the Kleptocracy Initiative at the conservative Hudson Institute. "If this is accurate, hard to see how it squares with – for example–cracking down on cartel finances or maximum pressure sanctions on Iran."
President Trump meanwhile spoke about his fondness for cryptocurrency on the campaign trail and promised to scale back on enforcement and regulation. The president even issued his own crypto token which briefly soared to $10 billion in value around the time of his inauguration.