The U.S. Department of Justice has formally disbanded its National Cryptocurrency Enforcement Team (NCET) and will significantly narrow its scope in prosecuting crypto-related activities. In a memo circulated internally and later shared publicly, Deputy Attorney General Todd Blanche confirmed that the agency will no longer pursue criminal cases against cryptocurrency exchanges, mixing services, or holders of cold wallets—unless they are directly involved in clear criminal activity such as fraud, embezzlement, or hacks.
The internal directive represents a major shift in the DOJ’s posture toward digital asset services. Under the new guidance, the department will avoid criminal charges in cases where platforms or individuals were not knowingly complicit in regulatory violations, or where violations stemmed from user behavior beyond their control.
The memo, dated April 8, was posted publicly on X by Amanda Tuminelli, executive director of the DeFi Education Fund. A source familiar with the matter confirmed its authenticity to reporters, while early coverage was first published by Fortune.
By scaling back enforcement on services like Tornado Cash and noncustodial wallet tools, the DOJ appears to be aligning more closely with the current administration’s deregulatory approach to crypto infrastructure. This policy change could ease pressure on privacy tools and decentralized services that have come under heavy scrutiny in recent years.
The Fate of Tornado Cash and Similar Tools
This change directly impacts services like Tornado Cash, which had previously drawn high-level scrutiny due to their anonymizing features. While mixing protocols have been widely used by privacy advocates and developers, they’ve also been linked to criminal groups and state-sponsored actors—including North Korea’s Lazarus Group.
The new stance contrasts sharply with actions taken in 2023, when the DOJ filed money laundering charges against Tornado Cash developer Roman Storm. Storm has consistently argued that the protocol is permissionless and does not exercise control over how users engage with the software. That case, along with others like it, could now be reconsidered under the DOJ’s revised framework.
Last month, the U.S. Treasury Department complied with a federal court order to lift sanctions on Tornado Cash, further signaling a softening approach. In line with this, the DOJ memo directs prosecutors to dismiss active cases that conflict with the department’s updated crypto enforcement guidelines—effectively ending pursuit of platform-level liability where criminal intent cannot be clearly established.
DOJ Cites Trump Executive Order in Crypto Enforcement Rollback
The Department of Justice has confirmed that its new policy aligns directly with a January executive order from President Donald Trump, which directed federal agencies to safeguard citizens’ and businesses’ rights to access public blockchain networks without the risk of regulatory overreach.
In his memo, Deputy Attorney General Todd Blanche referenced the previous administration’s approach—led by President Joe Biden—as a miscalculated attempt to regulate digital assets through aggressive legal action. Blanche described the prior DOJ strategy as a “reckless” use of enforcement tools, arguing it lacked both clarity and consistent application.
Under the revised framework, the DOJ will no longer treat compliance failures by crypto companies as prosecutable offenses when those issues arise from unclear or decentralized internal decisions. The focus will instead center on willful misconduct, such as fraud, theft, or other criminal schemes carried out with direct intent.
This marks a significant ideological and operational shift for federal law enforcement. For industry advocates, the rollback represents a long-awaited recognition that digital asset regulation should be shaped through legislative and regulatory processes—not criminal courts. At the same time, critics warn that the new leniency may embolden actors who exploit legal gray areas in the crypto space.
Quick Facts
- The DOJ has disbanded its National Cryptocurrency Enforcement Team, shifting focus from platform regulation to prosecuting criminal misuse of digital assets.
- This policy change aligns with the Trump administration’s pro-cryptocurrency stance, emphasizing deregulation and innovation in the digital assets sector.
- The DOJ will prioritize cases involving the use of digital assets in crimes such as terrorism financing, drug trafficking, and organized crime.
