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The Trump administration is disbanding a unit in the Justice Department that was responsible for investigating cryptocurrency crimes, criticizing the Biden administration as too aggressive against the fast-growing industry.<\/p>\n
In a memo issued late Monday, Todd Blanche, the deputy attorney general, denounced his predecessors for investigating cryptocurrency operators in a manner he called \u201cill conceived and poorly executed.\u201d He instead instructed the department to narrow the focus of cryptocurrency investigations to crimes like fraud, drug trafficking and terrorism.<\/p>\n
The directive is in keeping with President Trump\u2019s broad embrace of the crypto industry during his campaign and in office as he moves to relax enforcement.<\/p>\n
The Trump family has expanded its business interests in the industry, including by establishing a crypto venture, World Liberty Financial<\/a>. Shortly before taking office, Mr. Trump issued his own memecoin<\/a>. And Trump Media & Technology Group, the social media company he is the majority shareholder in, has said it plans to introduce a number of digital asset investment products this year.<\/p>\n<\/div>\n<\/div>\n The Justice Department directive follows similar moves at the Securities and Exchange Commission, which has dismissed lawsuits and pending investigations involving matters in which crypto firms had not registered as exchanges. A number of S.E.C. lawyers on those cases have left the regulatory agency.<\/p>\n The S.E.C. has also drastically cut staffing of a crypto enforcement unit. As a matter of policy, the S.E.C. has said it is not going to seek to regulate memecoins because the novelty digital assets are not securities.<\/p>\n The Justice Department, in its memo, accused the Biden administration of a \u201creckless strategy of regulation by prosecution\u201d toward the world of digital currencies.<\/p>\n Going forward, Mr. Blanche wrote, prosecutors should pursue only cryptocurrency cases \u201cthat involve conduct victimizing investors,\u201d scams, hacking and use of crypto to finance other crimes like fentanyl or human trafficking. Such prosecutions, the memo said, \u201care important to restoring stolen funds to customers, building investor confidence in the security of digital asset markets and the growth of the digital asset industry.\u201d<\/p>\n He ordered a group of prosecutors who investigate market integrity and major frauds to stop pursuing cryptocurrency enforcement and focus instead on immigration matters and contractor fraud.<\/p>\n<\/div>\n<\/div>\n He also disbanded the national cryptocurrency enforcement team, a group within Justice Department headquarters that was created in recent years to handle such cases. Individual U.S. attorneys\u2019 offices may still pursue cases involving cryptocurrency-related investigations, Mr. Blanche wrote.<\/p>\n The new approach seems intended to prevent cases like the one filed in 2023 against the Binance founder Changpeng Zhao for violations of the Bank Secrecy Act, which requires financial institutions to verify the identities of their customers and report suspicious activity that might be evidence of money laundering. The company agreed to pay a $4.3 billion fine as part of its guilty plea.<\/p>\n In the first days of the administration, Trump officials signaled their displeasure with such cases when they effectively demoted the prosecutor who had founded the cryptocurrency enforcement team, Eun Young Choi.<\/p>\n That team was created in 2022 to help prosecutors penetrate the often murky world of cryptocurrency, as transnational criminals began to use digital money more and more to facilitate crimes.<\/p>\n Matthew Goldstein contributed reporting from New York.<\/p>\n<\/div>\n<\/div>\n