The U.S. Department of Justice has decided to dissolve the National Cryptocurrency Enforcement Unit, citing its ‘irresponsible approach’ to prosecuting cryptocurrency firms during the previous administration.
A recent report detailed that a four-page memo from U.S. Deputy Attorney General Todd Blanche announced the immediate disbandment of the crypto investigation unit. This move aligns with the former administration’s initiative to ease regulatory scrutiny on the cryptocurrency sector.
“The Department of Justice is not a regulator of digital assets. Nevertheless, the previous Administration employed the Justice Department to execute a reckless strategy of regulation through prosecution,” Blanche noted in the memo.
In light of this decision, Blanche encouraged DOJ staff to minimize their efforts in pursuing cases against cryptocurrency exchanges, mixers, and “offline wallets.” Instead, they are tasked with focusing on prosecuting “individuals who exploit digital asset investors.”
The National Cryptocurrency Enforcement Unit was created during the Biden presidency as a collaborative task force, comprising prosecutors from various divisions of the Justice Department, including money laundering and cybercrime units.
This unit was responsible for overseeing some of the most significant cryptocurrency cases in the nation. Notably, it handled the prosecution of Tornado Cash, a cryptocurrency mixer charged with money laundering violations.
Roman Storm, a co-founder of Tornado Cash, expressed on January 26 that he could face up to 45 years in prison for operating an unlicensed money-transmitting service, as well as charges related to conspiracy and sanctions evasion. Many in the crypto community supported Tornado Cash, asserting that the legal action against it penalized software developers.
Most recently, on March 21, the U.S. Treasury lifted sanctions against Tornado Cash, reinstating access for American users.
The NCET also pursued charges against Avraham Eisenberg, a hacker who exploited the crypto trading protocol Mango Markets for over $114 million. Last January, the platform announced a complete shutdown, giving users a deadline to close their positions before losing access to the site.
Additionally, the investigative unit conducted probes into North Korean operatives who assisted in laundering funds obtained through crypto hacks.