Get ready for a major shift in crypto regulation! The Trump administration has made a surprising move, deciding to disband the National Cryptocurrency Enforcement Team (NCET). This team was previously a central force in policing the crypto world. According to a memo from Deputy Attorney General Todd Blanche, which ABC News got a hold of, federal prosecutors are now being told to back off targeting crypto exchanges, mixers, tumblers, and even offline wallets when it comes to actions by regular users or unintentional regulatory slips.

Why Was the NCET Disbanded?

The memo explains the reasoning: “The Department of Justice is not a digital assets regulator.” This move is in line with President Trump’s generally pro-crypto position. He’s been pushing for the SEC and CFTC to lighten up on regulations and even wants to create a digital assets reserve. Blanche didn’t hold back his criticism of the Biden administration’s crypto strategy, calling it “regulation by prosecution” and saying it was “poorly executed.”

What Will Prosecutors Focus on Now?

So, what does this mean for where the DOJ will spend its time? The memo clarifies that they’ll now focus only on “individuals who use digital assets for serious criminal offenses.” Think things like terrorism, drug trafficking, hacking, and organized crime. This really tightens up the federal government’s crypto enforcement to focus on the big stuff.

What Happens to High-Profile Crypto Cases?

This policy change could have big implications for some high-profile crypto cases that are already underway. Cases like the prosecutions of Tornado Cash and Avraham Eisenberg, which were being handled by the Southern District of New York, might be affected. Blanche’s memo hints that these kinds of cases – targeting crypto platforms and traders for things like regulatory hiccups and market manipulation – might not be a priority for the DOJ anymore.

Was Sam Bankman-Fried Treated Unfairly?

Blanche also weighed in on the previous administration’s prosecution of Sam Bankman-Fried. He seemed to think their approach didn’t properly consider the wild swings of the crypto market. His point was that figuring out victim losses based on old crypto prices wasn’t fair to the defendants and could actually stop victims from benefiting if crypto prices went back up.

What Does This Mean for Crypto in America?

Overall, this is a big shift in how the federal government watches over crypto. It looks like we’re heading towards a more hands-off approach under the Trump administration. With enforcement now mainly targeting serious criminal behavior, the wider crypto world might see less intense oversight. However, it does raise some important questions about keeping investors safe and making sure the market stays honest.