The US Department of Justice (DOJ) is reportedly disbanding the National Cryptocurrency Enforcement Unit (NCET) to comply with President Donald Trump’s regulatory shift towards digital assets.
DOJ Disbands Crypto Enforcement Unit
On Monday evening, the DOJ notified its staff that the NCET, the unit dedicated to crypto investigations, would be disbanded “effective immediately,” a Fortune report claims. The news media outlet reviewed a four-page memo announcing the decision and criticizing the previous administration’s crackdown on the industry.
US Deputy Attorney General Todd Blanche wrote, “The Department of Justice is not a digital assets regulator. However, the prior Administration used the Justice Department to pursue a reckless strategy of regulation by prosecution.”
Blanche, the second-ranking official in the DOJ, explained that the crypto enforcement unit’s disbandment was part of the agency’s actions to “comply with Trump’s January executive order on digital assets,” aiming to establish regulatory clarity for the crypto sector.
Moreover, the Deputy Attorney General told the DOJ employees in the memo to focus on “prosecuting individuals who victimize digital asset investors” instead of crypto exchanges, mixers, and “offline wallets,” the report states.
The NCET was a joint task force established in October 2021 under the Biden administration and has been active since February 2022. It was formed with prosecutors from the agency’s money laundering and cybercrime units and attorneys from other district offices.
The enforcement unit worked on some of the most prominent crypto-related cases, including the Avraham Eisenberg lawsuit and Tornado Cash, which was recently delisted from the US Department of the Treasury’s Office of Foreign Assets Control (OFAC)’s Specially Designated Nationals (SDN) list.
The US New Regulatory Era
The DOJ move follows the Trump administration’s efforts to develop clear regulatory guidelines to protect investors and develop the industry. The US Securities and Exchange Commission (SEC) has reportedly taken similar actions to end the previous “regulation by enforcement” approach.
As reported by Bitcoinist, the SEC downsized its special unit for crypto enforcement actions in February. Five sources told The New York Times that the Commission’s special unit members were reassigned to other SEC departments.
The division was created in 2017 during the first Trump administration and comprised lawyers and staff dedicated to bringing industry-related enforcement actions. However, it significantly grew under Gary Gensler’s supervision.
The SEC’s enforcement unit nearly doubled its size to 50 dedicated positions in May 2022, bringing over 100 crypto-related actions during the Biden administration, allegedly “related to fraudulent and unregistered crypto asset offerings and platforms.”
It’s worth noting that the Commission, under acting chair Mark Uyeda, created a Crypto Task Force to review the agency’s approach toward digital assets. The task force, led by Commissioner Hester Peirce, is taking a “more enjoyable and less risky” approach than the SEC’s strategy in the last decade.
As part of these efforts, the regulatory agency is hosting four digital assets-dedicated roundtables in the coming months. Recent reports revealed that representatives from major industry players, like Coinbase and Uniswap Labs, will attend the first roundtable, scheduled for April 11.
