The Trump administration has disbanded a unit in the Justice Department responsible for investigating cryptocurrency crimes, accusing the Biden administration of being too aggressive towards the industry. In a memo, the deputy attorney general criticized past investigations as poorly executed and instructed a narrower focus on crimes like fraud, drug trafficking, and terrorism related to cryptocurrency.
President Trump has been supportive of the crypto industry, with his family expanding business interests in the field. The administration has relaxed enforcement and the Securities and Exchange Commission has also cut staffing in its crypto enforcement unit. The S.E.C has stated that it will not regulate memecoins as securities.
The Justice Department directive aims to focus on cases that involve victims, scams, hacking, and the use of cryptocurrency in crimes like human trafficking and drug trafficking. The approach prioritizes restoring stolen funds and investor confidence.
The memo also disbanded the national cryptocurrency enforcement team and instructed prosecutors to focus on immigration and contractor fraud instead. Individual U.S. attorney’s offices may still pursue cryptocurrency-related cases.
The new strategy is intended to prevent cases like the one filed against Binance founder Changpeng Zhao for violations of the Bank Secrecy Act. The former head of the cryptocurrency enforcement team was effectively demoted in the early days of the Trump administration, signaling a shift in approach towards regulating the industry.
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