TLDR
- DOJ disbanded its National Cryptocurrency Enforcement Team (NCET), ending many crypto-related investigations
- Six Senate Democrats led by Elizabeth Warren criticized this as “giving a free pass to cryptocurrency money launderers”
- The DOJ memo directed staff to stop pursuing cases against crypto exchanges and mixers for end user actions
- Democrats raised concerns about potential connections between the decision and Trump family crypto ventures
- Deputy AG Todd Blanche stated “The Department of Justice is not a digital assets regulator”
The Department of Justice (DOJ) has dismantled its National Cryptocurrency Enforcement Team (NCET), prompting strong criticism from Senate Democrats who describe the move as a “grave mistake” that could empower criminal activity in the crypto space.
Deputy Attorney General Todd Blanche announced the decision in an April 7 memo, stating that “The Department of Justice is not a digital assets regulator.” The memo directed DOJ staff to stop pursuing cases against crypto exchanges, mixers, or offline wallets “for the acts of their end users” and to halt criminal charges for regulatory violations involving crypto, including Bank Secrecy Act violations.
Democrats Push Back Against Enforcement Changes
Six Senate Democrats, led by Senator Elizabeth Warren of Massachusetts, sent a letter to Blanche on April 10 urging the DOJ to reverse its decision. The letter was also signed by Senators Richard Durbin, Mazie Hirono, Sheldon Whitehouse, Christopher Coons, and Richard Blumenthal.
“We write in response to your April 7, 2025 memo announcing your decision to give a free pass to cryptocurrency money launderers and to disband the DOJ’s National Cryptocurrency Enforcement Team,” the senators wrote. They warned that these decisions could support “sanctions evasion, drug trafficking, scams, and child sexual exploitation.”
The senators expressed particular concern about crypto mixing services, which can be used to obfuscate blockchain transactions. They described these services as “go-to tools for cybercriminals” and questioned why the DOJ would take a “hands-off approach to tools that are being used to support such terrible crimes.”
Impact on Law Enforcement Capabilities
Since its creation in 2021, the NCET had coordinated department-wide efforts to prosecute illicit activity involving cryptocurrency, including cases involving hundreds of millions worth of digital assets. The enforcement team had built expertise in this complex field.
In his memo, Blanche indicated that disbanding NCET would allow the DOJ to “focus on other priorities, such as immigration and procurement frauds.” The senators countered that NCET had been a “critical resource for state and local law enforcement who often lack the technical knowledge and skill to investigate cryptocurrency related crimes.”
New York Attorney General Letitia James also responded to the DOJ’s decision by urging Congress to pass federal legislation to regulate crypto markets. In a press release, her office highlighted that her letter “comes after the DOJ announced the dismantling of federal criminal cryptocurrency fraud enforcement, making a robust regulatory framework all the more critical.”
The senators requested a staff-level briefing no later than May 1, seeking “detailed information on the rationale behind these decisions.” They warned that the DOJ’s actions create a “systemic vulnerability in the digital assets sector” that criminals and adversaries will exploit.
Trump Family Connections Questioned
The Democratic senators also raised concerns about potential conflicts of interest related to the Trump family’s cryptocurrency ventures. Their letter suggested that “President Trump’s interest in selling his cryptocurrency may be the reason for easing law enforcement scrutiny.”
The Trump family has backed the crypto platform World Liberty Financial and its token. The platform is planning to launch a stablecoin, while President Trump’s sons, Eric Trump and Donald Trump Jr., are working to establish a crypto-mining company called American Bitcoin.
In his memo announcing the team’s disbandment, Blanche accused the previous Biden administration of using the Justice Department to “pursue a reckless strategy of regulation by prosecution.” This claim has been contested by the Democratic senators, who view the enforcement team as essential for combating crypto-related crime.
The dispute highlights ongoing tensions over the regulation of digital assets, with law enforcement priorities shifting under the new administration. The outcome of this conflict will likely shape how cryptocurrency-related crimes are investigated and prosecuted in the coming years.
