Justice Department disbanded its national cryptocurrency enforcement team

The Justice Department on April 7, 2025 issued a department-wide memorandum that disbanded the National Cryptocurrency Enforcement Team effective immediately and narrowed the kinds of digital-asset cases federal prosecutors were instructed to pursue. Deputy Attorney General Todd Blanche framed the change as an end to “regulation by prosecution,” declaring that the department was not a digital-asset regulator.

The order was institutionally significant because it did more than change rhetoric. It dissolved a specialized team built to coordinate cryptocurrency expertise, directed the Market Integrity and Major Frauds Unit to stop cryptocurrency enforcement, and told prosecutors to review pending matters against the new policy. The memo said investigations inconsistent with its priorities should be closed.

A narrower prosecution mandate

The memorandum did not announce a general retreat from fraud, theft or illicit-finance cases involving cryptocurrency. It instructed prosecutors to prioritize conduct that harmed digital-asset investors and consumers, including embezzlement, misappropriation of customer funds, scams, hacking and exploitation of smart contracts. It also preserved a focus on the use of digital assets in terrorism, narcotics and human trafficking, organized crime, and cartel or gang financing.

The boundary was aimed instead at cases in which a platform, developer or service provider could be held responsible principally for what users did, or for an unwitting regulatory violation. The memo said the department would no longer target virtual-currency exchanges, mixing and tumbling services, or offline wallets for the acts of end users under those circumstances.

Charging instructions made that distinction concrete. Prosecutors were told not to bring certain registration or licensing violations involving digital assets unless evidence showed that a defendant knew of the requirement and willfully violated it. They were also told to avoid charges requiring litigation over whether a digital asset was a security or commodity when an adequate alternative criminal charge was available. Exceptions remained possible through supervisory approval.

Those directions were exercises of prosecutorial discretion. They did not repeal federal statutes, decide the legal classification of any token, terminate civil authority held by agencies such as the Securities and Exchange Commission or Commodity Futures Trading Commission, or prevent future administrations from revising Justice Department policy.

What was dismantled

The Justice Department announced the National Cryptocurrency Enforcement Team on October 6, 2021 as a way to combine cybercrime, money-laundering and prosecutorial expertise. Its remit included exchanges, mixing services, infrastructure providers and other entities alleged to enable criminal misuse of digital assets. Removing that dedicated structure meant expertise would no longer be concentrated under the same national enforcement banner.

The April 7 memo reassigned guidance, training and industry-liaison responsibilities to the Computer Crime and Intellectual Property Section. That preserved an internal source of technical support, but it was not the same as retaining a team whose stated mission centered on crypto investigations and prosecutions.

Why April 7 marked a broader turn

The memo implemented President Donald Trump’s January 23, 2025 executive order directing the administration to support lawful access to open blockchain networks and fair access to banking services. It also landed on the same date that the Federal Deposit Insurance Corporation withdrew its prior-notification expectation for FDIC-supervised banks engaging in permissible crypto-related activities, while retaining normal safety-and-soundness review.

Together, the two actions signaled a coordinated change in federal posture: criminal prosecutors would emphasize identifiable victims and underlying crime, while a banking regulator removed a crypto-specific procedural hurdle. That was favorable policy context for exchanges, wallet providers, software developers and banks considering digital-asset services, but it was not immunity from fraud, sanctions, money-laundering or consumer-protection law.

Later publication context

The memo was sent to department employees on the night of April 7 and was reported publicly on April 8. The Justice Department’s later public repository confirms the April 7 date and text. This timing distinction matters: the policy action belongs to April 7, while broad public awareness followed one day later.