President Trump altered his stance on digital assets, suggesting a gentle approach, but the memo obtainable from Reuters highlights an NCET policy under the Biden administration that has now shifted towards greater leniency—in this case disbanding the national cryptocurrency enforcement division. The disbanded unit was used to enforce aspects of cryptocurrency on a national level, which resulted in the creation of a centralized governing framework. This level of control, however, conflicted with the policies of CC shoulders.
Firing the First Shots: Scrapping Cyber Prosecution Policies
Speculative memos such as these that circulate in governmental-level peripheries usually have underlying justifications. Todd Blanche, with the department’s primary investigative target, claimed, as often is given free rein to micro-manage at will, something tightly streamlining the DOJ’s fiscal policies. He also heavily focuses on “criminal activities” within single asset classes, such as disrupting the central authority concentration on digital currencies.
Dissolving NCET: A Symbolic Gesture
The NCET is an agency that the government created in February 2022 to address scams and financial crimes in the crypto space. It has now been disbanded. This marks a clear shift from the prior administration’s attempts to control the industry and supports Trump’s rhetoric on turning the US into the “crypto capital of the planet.”
Broader Approach: Focusing on Criminal Enterprises
In her memo, Blanche mentions the Justice Department will be focusing on prosecuting “those who prey on digital asset investors or use digital assets to advance illicit activities including terrorism, narcotics and human trafficking, organized crime, hacking, and cartel and gang financing.” Any active probes considered “inconsistent” with this new framework must be deemed complete.
Change Justification: Cited Executive Order
As justification for his order, Blanche cites a Trump executive order that mandates the government guarantee individuals and private entities “unfettered access to open blockchain networks without persecution.” This seems to justify an overall relaxed policy toward the regulation of crypto that the administration is trying to push.
I loosen the leash on the Justice Department as they now leave the responsibilities with mixers, tumblers, and offline virtual currency wallets that allow crypto transactions to be performed anonymously alone, stating that they will not impose anything beyond some limitations in terms of “acts that were done by their end users or through some unfortunate breaches of regulations.” This portrays a departure from pursuing violations of rules to focusing on attempts based on criminal misconduct of law.
The move by the Justice Department is a part of a broader regulatory rollback concerning the crypto industry under the Trump administration due to the fact that the SEC has also shifted its focus on crypto enforcement by putting some of the more public cases on hold or completely dismissing them, as well as the case with one banking regulator in the states who has permitted some banks to partake in limited crypto dealings.
The fact that Trump and his family directly invest in the cryptocurrency industry doesn’t pass unnoticed since, as has been stated by Reuters, the Trump family controls 75% of the revenues that were generated through tokens issued by the World Liberty Financial Crypto Venture. Furthermore, Trump himself issued a crypto token before being inaugurated and his family members indulged in the so-called “meme coins” as $TRUMP and $MELANIA.
Conclusion: A New Era for Enforcing Cross-Border Crime within Cryptocurrency.
The dismissing of NCET and offices focusing on crypto investigations during the Trump administration marks a critical change in U.S. policy. While this move stems from the need to foster innovation and lower red tape, it is likely to substantially shape the future of the cryptocurrency region. Yet, fears still exist regarding the possibility for enhanced illicit activity without sufficient control.
