DOJ Reduces Actions Against Digital Currency Fraud, A Trump Promise

The Justice Department directed prosecutors to ease litigation against people committing fraud with digital currency, the latest example of the Trump administration pulling back on white-collar crime enforcement.

In a memo on Monday night, Deputy Attorney General Todd Blanche said the department will no longer participate in regulation in the digital asset space and will instead focus on crimes that people commit with cryptocurrency, such as dealing narcotics and human trafficking, reports the Washington Post Prosecutors still are directed to pursue cases against people who defraud investors. Blanche will disband the National Cryptocurrency Enforcement Team, which was started in 2022 to “address the challenge posed by the criminal misuse of cryptocurrencies and digital assets.” The team was composed of Justice Department attorneys with backgrounds in cryptocurrency, cybercrime and money laundering.

Officials had transferred the founding head of the enforcement team — national security prosecutor Eun Young Choi — to a subsidiary position in a newly created sanctuary cities division. The memo is response to an order President Trump issued in his first days in office that called on the Justice Department and other agencies to assess regulations and guidance that affect digital currency. Blanche described the Biden administration’s cryptocurrency enforcement “as a reckless strategy of regulation by prosecution, which was ill-conceived and poorly executed.” Blanche said the Justice Department will largely not bring cases over violations of the Bank Secrecy Act or that contain unregistered broker dealer violations and other registry requirements under the Commodity Exchange Act. Trump promised during his campaign to ease regulation and enforcement against crypto companies, which helped his campaign raise donations among tech investors and digital assets executives who said they had been persecuted by the Biden administration’s efforts to regulate the market.