US Department of Justice Shuts Down National Cryptocurrency Enforcement Team
The US Department of Justice (DOJ) has reportedly disbanded the National Cryptocurrency Enforcement Team (NCET), a specialized division established to investigate crypto-related crimes.
NCET’s Closure
The NCET was launched in 2021 under the Biden administration, gathering experts from multiple DOJ divisions, including cybercrime and money laundering units, to pursue high-profile cases involving digital assets. The task force was involved in enforcement actions against platforms like Tornado Cash and investigated crypto activity linked to North Korean operatives.
Deputy Attorney General Todd Blanche clarified the DOJ’s new direction, stating that the department’s focus now centers on prosecuting bad actors rather than the broader crypto industry. He emphasized that the DOJ is not a financial regulator and criticized the previous administration’s approach of enforcing unclear crypto rules through litigation.
"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 said.
Considering this, Blanche has directed DOJ personnel to focus solely on targeting criminal activity within the crypto sector – particularly scams, fraud, and market manipulation – rather than scrutinizing legitimate entities such as crypto exchanges, wallet providers, or decentralized privacy tools.
US Agencies Rethink Crypto Oversight
The DOJ’s move is part of a wider recalibration across federal agencies as President Donald Trump seeks to create a more favorable environment for crypto innovation. This has resulted in regulatory bodies like the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) reviewing their crypto policies to align with the new administration’s effort.
For context, Acting SEC Chair Mark Uyeda recently confirmed plans for a comprehensive review of existing policies, including the Howey Test, which determines whether a digital asset qualifies as a security.
"The purpose of this review is to identify staff statements that should be modified or rescinded consistent with current agency priorities," Uyeda said.
Regulatory Changes and Implications
The DOJ’s decision to disband the NCET reflects a shift in the federal government’s approach to regulating the crypto industry. The move is part of a broader effort to create a more favorable environment for crypto innovation and entrepreneurship.
The SEC and CFTC are also reviewing their policies to align with the new administration’s effort. This could lead to changes in the way these agencies regulate and oversee the crypto industry.
Conclusion
The US Department of Justice’s decision to disband the National Cryptocurrency Enforcement Team marks a significant shift in the federal government’s approach to regulating the crypto industry. The move reflects a focus on prosecuting bad actors rather than scrutinizing legitimate entities.
As the regulatory landscape continues to evolve, it remains to be seen how the SEC and CFTC will adapt their policies to align with the new administration’s effort. One thing is certain, however, the crypto industry will continue to face increased scrutiny and oversight as it navigates the complexities of federal regulation.
FAQs
Q: What is the National Cryptocurrency Enforcement Team (NCET)?
A: NCET was a specialized division within the US Department of Justice established to investigate crypto-related crimes.
Q: Why was the NCET disbanded?
A: The NCET was disbanded as part of a wider recalibration of the federal government’s approach to regulating the crypto industry.
Q: What is the new direction for the DOJ?
A: The DOJ will now focus on prosecuting bad actors in the crypto sector, particularly those involved in scams, fraud, and market manipulation.
Q: What is the significance of the SEC’s review of existing policies?
A: The SEC’s review of existing policies, including the Howey Test, could lead to changes in the way the agency regulates and oversees the crypto industry.
Q: What are the implications of the DOJ’s decision on the crypto industry?
A: The DOJ’s decision to disband the NCET reflects a shift in the federal government’s approach to regulating the crypto industry, which could lead to increased scrutiny and oversight of the sector.
