US Ministry of Justice dissolves crypto penalty investment unit-Crypto Valley Journal

The US Justice Ministry (DOJ) has announced the dissolution of its specialized unit to combat crypto crime, the National Cryptocurrency Enforcement Team (NCET).

The unit was founded in 2021 and has so far been a central authority in law enforcement in the field of digital assets. The decision to dissolve is part of a more comprehensive change of strategy under the Trump administration.

Background of the decision

According to Todd Blanche, deputy attorney in general and confidante by Donald Trump, it was not the task of the Doj to act as a regulatory authority for the crypto sector. This emerges from a memo, like Reuters reported. Instead, in the future they want to concentrate specifically on the criminal prosecution of actual fraud. Platforms such as stock exchanges, Wallet-Provider or DeFiSo projects should no longer be under general suspicion as long as they behave in accordance with the law.

Blanche also emphasized that the previous practice of “regulation through law enforcement” was a relic of the past government and that investments and innovation in the industry inhibited. Instead, the department will investigate “persons who cheat investors in digital assets, or against people who use digital assets to commit crimes such as terrorism, drug and human trafficking, organized crime, hacking as well as cartel and gang financing”.

Success and dissolution of the NCET

The NCET was responsible for numerous prominent investigations. This included the procedures against the crypto mixer Tornado Cash, the indictment against Avraham Eisenberg due to an exploit of over $ 100 million, as well as the persecution of North Korean hacker groups. Despite its short term, the NCET was able to set important standards – their resolution is therefore a surprising step. The investigators of the former unit are now to be integrated into other DOJ departments, where they continue to work in cases with cryptocurrency reference.

The Trump government has been pursuing a more economic-friendly line towards the crypto industry since its return to office. In addition to the dissolution of the NCET, the powers of the SEC and CFTC in the crypto area were also return. The aim is to provide the United States a leadership role in blockchain innovation. The focus is now clearly on combating fraud-not on the general monitoring of the crypto market.