It has been reported that the National Cryptocurrency Enforcement Team (NCET) is being disbanded by the United States Department of Justice (DOJ).
The decision to disband NCET was detailed in a four-page memo from Deputy General Todd Blanche, as noted by a journalist who claimed to have seen the document on April 8. The memo includes a statement from Blanche:
“The Department of Justice is not a regulator of digital assets. However, the previous Administration utilized the Justice Department to pursue a reckless strategy of regulation through prosecution.”
Blanche, who is the DOJ’s second-highest-ranking official, previously served as a defense attorney for former President Donald Trump in several high-profile cases, including the New York hush money matter and federal investigations regarding classified documents and the 2020 election.
Understanding the NCET
The NCET was established in October 2021 during the Biden Administration, with the goal of targeting platforms that facilitate money laundering and concealment of criminal proceeds. At its inception, Deputy Attorney General Lisa Monaco stated:
“Our aim is to enhance our ability to dismantle the financial networks that allow these criminal actors to thrive — and, quite frankly, to profit from their activities.”
The NCET had been operational since February 2022, and its website remains active at the time of writing. The disbandment is said to be effective immediately, aligning with Trump’s executive order from late January that is reshaping the country’s cryptocurrency policy.
NCET website.
Trump’s Influence on U.S. Crypto Policy
Before his return to office, Trump campaigned on a pro-cryptocurrency platform. He advocated for the establishment of a strategic Bitcoin reserve for the United States, participated in crypto events before and after his reelection, and expressed his intentions to make the U.S. a leading nation in the crypto space. Additionally, he appointed a pro-crypto chair for the Securities and Exchange Commission.
Despite the administration’s supportive stance towards crypto, critics have voiced concerns about possible conflicts of interest. Trump and his family are linked to the World Liberty Financial decentralized finance protocol, the Official Trump memecoin, and Trump Media is set to launch crypto exchange-traded funds in conjunction with Crypto.com.
These initiatives have sparked various controversies, including insider trading allegations related to the presidential memecoin, which were later attributed by some to market activity. There were also concerns about the implications of the World Liberty Financial USD stablecoin on ongoing bipartisan efforts to enact stablecoin legislation in Congress.
This prompted five Democratic Senators to urge regulatory agencies to scrutinize the potential conflicts of interest associated with the USD stablecoin in late March. Earlier in April, Representative Maxine Waters from California suggested that Trump might intend to replace the U.S. dollar with his stablecoin.