The U.S. Department of Justice is disbanding the National Cryptocurrency Enforcement Unit, citing its ‘reckless strategy’ in prosecuting crypto firms in the previous administration.
According to a recent report by Fortune, a four-page memo issued by U.S. Deputy Attorney General Todd Blanche revealed the decision to disband the crypto-related investigation unit “effective immediately.” The decision is part of the Trump administration’s efforts to loosen oversight on the crypto industry.
““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,” stated Blanche in the memo.
Following the announcement, Blanche also urged DOJ staff members to spend less time pursuing cases against crypto exchanges, mixers and “offline wallets.” Instead, they are directed to focus on prosecuting “individuals who victimize digital asset investors.”
The National Cryptocurrency Enforcement Unit was established under Joe Biden’s presidency as a joint task force that consisted of prosecutors from the Justice Department’s money laundering, cybercrime units, as well as other district offices.
The The National Cryptocurrency Enforcement Unit task force oversaw some of the largest crypto cases in the country. One in particular was the case against cryptocurrency mixing service Tornado Cash, which was prosecuted for money-laundering charges.
Tornado Cash co-founder Roman Storm stated on Jan. 26 that he faces up to 45 years of imprisonment for operating an unlicensed money-transmitting business, conspiracy to commit money laundering and sanction evasion. Many crypto industry figures stood in support of Tornado Cash, viewing it as a case that criminalized software developers.
Most recently on March 21, the U.S. Treasury lifted sanctions against Tornado Cash, allowing Americans to access it once more.
The NCET also prosecuted Avraham Eisenberg, a hacker who exploited a crypto trading protocol Mango Markets for more than $114 million. Last January, the platform officially announced it was completely shutting down operations, giving users a deadline to close positions before they can no longer access the site.
In addition, the joint investigation unit had also led investigations that scrutinized North Korean actors who helped launder funds stolen from crypto hacks.
