Trump Admin Asks Prosecutors to Hit the Brakes on Crypto Enforcement

The federal government is making a significant shift in its approach to cryptocurrency by pulling back federal enforcement efforts and dissolving a unit specifically created to handle crypto-related crimes.

A memo from Deputy Attorney General Todd Blanche states that federal prosecutors have been instructed to stop targeting crypto exchanges, offline wallets, and coin mixing services based solely on actions taken by users or unintentional violations of existing rules.

According to the memo, the Justice Department (DOJ) will no longer act as a regulator for digital assets. It also announced the immediate dissolution of the National Crypto Enforcement Team (NCET).

This move aligns with Trump’s broader stance on easing restrictions around digital currencies. In the past, he has directed the Commodity Futures Trading Commission (CFTC) and the Securities and Exchange Commission (SEC) to take a lighter approach to regulating crypto and supported the idea of establishing a crypto assets reserve.

Blanche’s memo criticized the Biden administration’s strategy, accusing it of using the DOJ to enforce regulations through aggressive prosecutions, a method he labeled as careless and flawed. Under the Trump administration, efforts will now shift toward prosecuting individuals who use digital assets to commit serious crimes like money laundering, drug trafficking, terrorism, gang and cartel financing, hacking, and organized crime, rather than focusing on technical or regulatory violations.

This new direction signals a likely halt to high-profile cases that were pursued under Biden’s leadership, such as the charges against Tornado Cash—allegedly used to launder over a billion dollars—and Avraham Eisenberg, convicted in 2024 for manipulating the market in a $110 million scheme. Both cases originated from New York’s Southern District, which has led several aggressive crypto prosecutions in recent years.

Blanche also appeared to take issue with the handling of Sam Bankman-Fried’s prosecution. The previous administration labeled him the architect of a massive financial fraud, but Blanche criticized how victim losses were calculated. He argued that many investors were only reimbursed based on the lower value of their assets at the time of the fraud, without accounting for market gains that happened later. This perspective echoes a claim made by Bankman-Fried himself—that those affected by his actions have already recovered their money.

In closing, the memo ordered prosecutors to reassess how they pursue digital asset-related cases, signaling a major shift in the federal government’s approach to cryptocurrency enforcement. This shift is one that could signal a future of clear federal regulatory systems for entities like BitFuFu Inc. (NASDAQ: FUFU) as they make their long-term strategic plans.

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