The US Department of Justice (DoJ) has announced the dissolution of its National Cryptocurrency Enforcement Team (NCET), marking a significant shift in the way the government approaches cryptocurrency-related crimes. This move, framed by a memo from Deputy Attorney General Todd Blanche, highlights the ongoing transition in the enforcement policies surrounding digital assets. The disbandment of the NCET comes in the context of an executive order signed by former President Donald Trump, which directs the Justice Department to focus on criminal activity rather than attempting to regulate the emerging cryptocurrency sector.
Table of Contents
DOJ Disbands NCET Amid Changing Enforcement Priorities
The National Cryptocurrency Enforcement Team (NCET) was established in 2021 to combat the rising threats associated with cryptocurrency misuse. This included tackling crimes like money laundering, fraud, and the illegal activities conducted by virtual currency exchanges, mixing services, and other infrastructure providers. The unit’s creation represented a response to the increasing complexity of cryptocurrency-related offenses and the need for specialized expertise.
However, recent developments, including a change in the executive leadership of the United States, have led to a significant shift in the Department of Justice’s approach. Deputy Attorney General Todd Blanche’s memo, titled “Ending Regulation By Prosecution,” outlines that the NCET will be disbanded immediately. The Justice Department’s focus will now be realigned to investigate and prosecute individuals involved in criminal offenses, such as terrorism, human trafficking, and organized crime, that make use of cryptocurrencies.
The decision to disband the NCET is rooted in a broader political context, namely, the directives issued by former President Trump in his second term. Specifically, an executive order signed by Trump in January 2025, “Strengthening American Leadership in Digital Financial Technology,” calls for the cessation of the regulatory framework created by the previous administration. This order revokes the policies under President Biden’s administration, particularly those that focused on using the Justice Department as a regulatory authority for digital assets.
Blanche’s memo explains that under the new approach, the Department of Justice will not pursue digital asset regulation through criminal prosecutions. Instead, it will use its resources to prosecute cases where digital assets are involved in crimes, such as fraud, human trafficking, and other illegal activities. This change is intended to align the Justice Department’s role with the objectives of Trump’s administration, which seeks to reduce the regulatory burden on digital asset markets.
NCET’s Role and Achievements Before the Disbandment
The NCET was designed to address the growing need for specialized knowledge in investigating cryptocurrency crimes. Led by Eun Young Choi, the NCET was tasked with investigating complex cases involving cryptocurrency exchanges and services that obscured the origins and destinations of digital transactions. This includes the mixing and tumbling services commonly used in money laundering schemes. The team was also responsible for handling cases related to financial crimes involving digital assets, leveraging its deep understanding of blockchain technology, digital wallets, and other tools used in the cryptocurrency ecosystem.
Despite the decision to disband the NCET, some of its functions will continue within the Criminal Division’s Computer Crime and Intellectual Property Section (CCIPS). As outlined in Blanche’s memo, CCIPS will take on the responsibility of providing guidance, training, and liaising with the digital asset industry to ensure that the Department of Justice remains knowledgeable about the evolving technology.
In July 2023, the NCET had already been merged into CCIPS to create a single office with consolidated expertise in cybercrime investigations. At that time, NCET’s mission to investigate criminal abuses of cryptocurrency, in partnership with the Money Laundering and Asset Recovery Section (MLARS), was reaffirmed. Despite the team’s dissolution, this collaborative approach will continue within CCIPS, focusing on cases involving money laundering, digital asset seizure, and financial crimes.
Shifting Resources and Focus on Crime Prevention
The disbandment of the NCET is part of a broader shift in the Department of Justice’s enforcement strategy under the Trump administration. The memo outlines that US Attorneys’ Offices will now focus on more traditional criminal justice tools to prosecute crimes related to digital assets. The Market Integrity and Major Frauds Unit, which had previously focused on cryptocurrency enforcement, will now redirect its resources to tackle other types of fraud, such as immigration fraud and procurement fraud.
This shift reflects a growing recognition that cryptocurrency-related crimes should be handled within the broader framework of criminal law, rather than through a separate regulatory structure. The Justice Department’s new policy aims to target individuals who use digital assets for illicit activities, while leaving regulatory oversight to other entities outside the Department of Justice. This marks a departure from the previous administration’s approach, which sought to regulate digital assets through prosecution.
The Broader Impact on the Crypto Industry
The decision to disband the NCET and the subsequent shift in the Department of Justice’s approach is expected to have a significant impact on the cryptocurrency industry. The creation of the NCET was seen as a step toward addressing the growing concerns over cryptocurrency-related crimes, particularly money laundering and fraud. Its dissolution could signal a reduction in the level of scrutiny the cryptocurrency industry faces from law enforcement, but it may also lead to increased reliance on the private sector and other regulators to ensure compliance with anti-money laundering (AML) and know your customer (KYC) regulations.
One potential outcome of this policy shift is that cryptocurrency exchanges and digital asset providers may face less pressure from the government to implement stringent compliance measures. This could lead to greater innovation within the industry, as companies are no longer required to navigate the complex and sometimes contradictory regulatory landscape. However, it could also raise concerns about the ability of law enforcement to effectively combat financial crimes involving cryptocurrencies, which continue to be a growing threat in the global financial system.
Conclusion: A New Era for Cryptocurrency Enforcement
The dissolution of the NCET represents a major change in the way the US government approaches the regulation and enforcement of cryptocurrency-related crimes. By shifting the focus from regulation through prosecution to traditional criminal justice tools, the Department of Justice is aligning its policies with the broader objectives of the Trump administration. While this change may reduce the regulatory burden on the cryptocurrency industry, it also raises questions about how effectively law enforcement will be able to address the ongoing challenges posed by cryptocurrency-related crimes.
As the digital asset market continues to evolve, it will be crucial for regulators, law enforcement, and the private sector to work together to ensure that the benefits of cryptocurrencies are realized without enabling criminal activity. The future of cryptocurrency regulation remains uncertain, but this shift in the Justice Department’s approach marks a key moment in the ongoing evolution of the digital asset landscape.
Related Links
- US Department of Justice’s official press release on the NCET disbandment
- Trump signs executive order on digital financial technology
- Securities and Exchange Commission’s Cyber and Emerging Technologies Unit
- Biden’s cryptocurrency regulatory framework under review
- Crypto fraud prevention measures discussed at the White House
