US Department of Justice Dismantles Crypto Task Force, Prioritizes Terrorism and Investor Protection

In a significant move, the US Department of Justice (DOJ) has disbanded its National Cryptocurrency Enforcement Team (NCET), effective immediately. This decision marks a major shift in the federal government’s approach to handling crypto-related crimes. According to a memo from Deputy Attorney General Todd Blanche, the DOJ will now adopt a decentralized approach, with US attorney’s offices taking the lead on digital asset cases.

Prioritizing Terrorism and Investor Protection

Going forward, the DOJ will prioritize prosecuting individuals who:

• Victimize Digital Asset Investors: Those who cause financial harm to investors and consumers through digital assets.
• Use Digital Assets for Criminal Activities: Individuals using digital assets to further crimes such as
  • Terrorism Financing : Supporting terrorist organizations through digital asset transactions.
  • Narcotics and Human Trafficking : Utilizing digital assets to facilitate illicit activities.
  • Organized Crime, Hacking, and Cartel Financing : Engaging in digital asset transactions that support organized crime, hacking, or cartel operations.

Key Changes in Enforcement Policy

The DOJ’s new policy outlines several key changes:

• No Enforcement Against Crypto Exchanges: The DOJ will not pursue enforcement actions against crypto exchanges, mixing and tumbling services, or offline wallets for user actions or unwitting regulatory violations.
• Prosecution Only with Proof of Intent: Prosecutors will not charge financial law violations unless they can prove the defendant knowingly and willfully broke the rules.
• Closure of Non-Priority Investigations: Ongoing investigations not aligning with the new priorities will be closed.

This policy shift aligns with President Donald Trump’s executive order promoting open access to blockchain networks and reflects his administration’s support for easing regulations in the digital assets industry.

Trump Family’s Crypto Ventures

The Trump family has launched World Liberty Financial, a decentralized digital bank. It has sold $550 million in tokens, with 75% of profits going to Trump-linked entities. This project aims to boost the US dollar’s global status in DeFi and promote stablecoins and decentralized finance.

World Liberty Financial has bought significant amounts of cryptocurrency, including $47 million worth of Ethereum and wrapped Bitcoin. The project’s governance token, WLFI, has 100 billion tokens but is currently non-transferable, with only governance voting rights.

The Trump family is also involved in meme coins branded with their names, generating revenue. This reflects their growing interest in cryptocurrency and efforts to capitalize on the trend.

Impact of DOJ’s Policy Shift on Crypto Industry

The US Department of Justice (DOJ) has shifted its focus towards prosecuting individuals who use digital assets for serious crimes, such as terrorism, human trafficking, and cybercrime. The Market Integrity and Major Frauds Unit will cease cryptocurrency enforcement efforts, while the Computer Crime and Intellectual Property Section will provide guidance and training to Justice Department personnel.

The Trump administration’s deregulation efforts have significantly altered oversight. The Securities and Exchange Commission has paused or abandoned several high-profile enforcement actions. Despite this, the digital asset market has declined. Bitcoin’s value dropped to around $78,000. The wider crypto market lost over $1.2 trillion in market capitalisation since December.