In a move that has sent ripples through the digital asset community, the U.S. Department of Justice (DOJ) officially disbanded its National Cryptocurrency Enforcement Team (NCET) on April 7, 2025. The decision, announced in a memo from Deputy Attorney General Todd Blanche, marks a significant shift in how the federal government approaches crypto-related enforcement. While the Biden-era initiative was aimed at cracking down on illicit uses of digital assets, the Trump administration has signaled a new approach: scaling back regulatory oversight in favor of fostering innovation and focusing law enforcement efforts on overt criminal activity.
This article explores what the NCET was, why it has now been shut down, and what the implications are—both positive and negative—for the future of cryptocurrency in the United States.
The Role of the National Cryptocurrency Enforcement Team
The NCET was formed in 2021 under President Biden’s administration as part of a broader effort to address the rising misuse of cryptocurrencies in financial crimes. Its primary mandate was to investigate and prosecute platforms that facilitated illegal activities, including money laundering, ransomware attacks, sanctions evasion, and unlicensed money transmission. These efforts often targeted crypto exchanges, mixing services, and decentralized platforms that authorities alleged were turning a blind eye to—or actively enabling—criminal behavior.
Staffed by experts from across the DOJ, the Federal Bureau of Investigation (FBI), and other federal agencies, the NCET played a central role in high-profile cases such as the takedown of darknet marketplaces and the prosecution of rogue crypto platforms. The team was particularly known for going after entities that failed to implement robust Know-Your-Customer (KYC) and Anti-Money Laundering (AML) procedures. However, critics of the team often claimed that its aggressive enforcement style stifled innovation and created a chilling effect on legitimate projects within the crypto ecosystem.
Why the DOJ Disbanded the Crypto Unit
The disbandment of the NCET is part of a broader recalibration under the Trump administration’s approach to digital asset policy. In his April 7 memo, Deputy Attorney General Todd Blanche outlined the administration’s intention to shift DOJ resources away from blanket enforcement against crypto entities and toward criminal investigations focused on drug trafficking, terrorism financing, human trafficking, and organized crime.
The rationale behind this move is twofold. First, the administration argues that crypto platforms should not be held liable for the actions of individual users, especially when those platforms are not knowingly facilitating illicit behavior. Second, the DOJ believes that scarce law enforcement resources should be directed toward intentional bad actors rather than platforms caught up in regulatory gray areas or technical non-compliance.
This regulatory rollback mirrors similar moves at the Securities and Exchange Commission (SEC), which has also begun easing enforcement against digital asset companies that fail to register tokens or platforms, as long as there is no intent to defraud investors. The coordinated effort reflects a deliberate push by the Trump administration to scale back what it sees as overregulation in the crypto space.
A Boost for Innovation and Growth?
Many in the cryptocurrency industry have welcomed the move as a long-overdue correction. The regulatory ambiguity and aggressive enforcement tactics of the last several years have deterred investment, driven innovation offshore, and discouraged legitimate entrepreneurs from engaging with the U.S. market. By ending the NCET’s sweeping mandate, the DOJ is signaling to the industry that it supports technological progress—so long as that progress is not used to facilitate crime.
Startups and blockchain developers, in particular, stand to benefit from reduced legal uncertainty and a lower risk of prosecution for technical or administrative oversights. Exchanges that operate in good faith but have struggled to keep pace with fast-evolving regulatory expectations may also find relief in the DOJ’s more restrained posture.
In addition, this shift may encourage more institutional adoption. With less fear of enforcement actions that can freeze assets or tarnish reputations, financial institutions and venture capital firms might feel more comfortable exploring crypto partnerships and investments within U.S. borders. It’s a move that could restore the United States as a leader in blockchain innovation—a position it has been steadily losing to jurisdictions with clearer and more business-friendly rules.
Growing Concerns About Consumer Protection and Crime
However, the disbandment of the NCET is not without significant controversy. Critics argue that this move removes one of the few specialized enforcement teams capable of dealing with the complex and fast-moving world of digital asset crime. Without NCET’s oversight, they say, crypto-related fraud and scams could surge unchecked, leaving everyday investors more vulnerable than ever.
The absence of dedicated federal enforcement could embolden bad actors who exploit the relative anonymity and speed of blockchain technology to commit financial crimes. Past incidents involving fraudulent initial coin offerings, phishing scams, rug pulls, and unregistered exchanges have shown how quickly harm can spread in the crypto world without regulatory guardrails.
There are also concerns that without centralized enforcement, money laundering and terrorist financing via crypto could increase. Mixers and privacy-enhancing tools, often cited as critical for individual privacy, can also be used to obscure illicit transactions. Without a focused unit like the NCET to track these threats, some fear that the United States could become a safe haven for crypto-based financial crime.
Democratic lawmakers have been especially vocal in their opposition to the move, calling it a “free pass” for criminals and a step backward in the fight against corruption. They argue that the DOJ’s new focus leaves a vacuum in the oversight of emerging financial technologies and may encourage bad behavior from platforms that no longer fear federal scrutiny.
Calls for Legislative Action
The DOJ’s decision may also intensify pressure on Congress to enact comprehensive cryptocurrency legislation. With federal regulators stepping back, state authorities may attempt to fill the void with their own rules and enforcement actions. This could lead to a fragmented regulatory landscape, where compliance becomes even more complicated for companies operating across state lines.
Several lawmakers have already introduced bills aiming to clarify how digital assets should be regulated, define which agencies have jurisdiction, and set baseline consumer protections. But so far, Congress has struggled to pass cohesive legislation. Now, with NCET gone, the need for legislative clarity is more urgent than ever.
Industry advocates argue that a clear legal framework would provide businesses with the certainty they need to innovate responsibly while still protecting investors and deterring crime. Critics of deregulation, meanwhile, insist that any new legislation must include robust enforcement mechanisms to prevent abuse and ensure accountability.
A Risky but Pivotal Moment for Crypto
The disbandment of the National Cryptocurrency Enforcement Team represents a pivotal moment in the ongoing evolution of U.S. crypto policy. It underscores a dramatic shift away from aggressive regulation and toward a market-driven approach that prioritizes innovation and entrepreneurship. For developers, investors, and crypto businesses, this could open the door to new opportunities, fewer compliance hurdles, and faster time to market.
Yet this deregulation also comes with risks. Without specialized oversight, users may be more exposed to scams, fraudulent exchanges, and systemic vulnerabilities. Consumer trust, already shaken by high-profile collapses and security breaches, may erode further if protections aren’t clearly defined and enforced elsewhere.
Ultimately, the future of the industry will depend on how well it can self-regulate in this new environment—and whether lawmakers can step up to create thoughtful, balanced regulations that encourage growth while ensuring accountability. Until then, the crypto sector stands at a crossroads, navigating the complex trade-off between freedom and safety in a fast-changing digital world.
