The U.S. Department of Justice (DOJ) has quietly disbanded its National Cryptocurrency Enforcement Team (NCET), signaling a shift in federal strategy from proactive crypto regulation toward a reactive criminal focus. While the DOJ claims the move will “streamline priorities,” critics warn this could widen enforcement gaps in the volatile digital asset space.
Key Points:
- DOJ dissolves the NCET, formed in 2021 to target illicit crypto activities.
- New strategy prioritizes terrorism, organized crime, and child exploitation involving crypto—not regulatory violations.
- Policy shift aligns with Trump-era White House initiative, promoting blockchain access and innovation.
- Legal experts fear this may undermine regulatory deterrence in the crypto sector.
- DOJ’s silence on transition timing raises transparency concerns.
Short Narrative:
The DOJ has scrapped the NCET, a unit that once spearheaded high-profile prosecutions against crypto exchanges and DeFi fraudsters. In a barely noticed policy move, the DOJ has redirected these responsibilities to broader criminal divisions, arguing that the fight against crypto misuse must focus on terrorism financing, organized crime, and human trafficking. Left behind are concerns over diminished oversight of market manipulation, unregistered securities offerings, and tokenized fraud schemes that have plagued the sector.
This structural downgrade comes on the heels of Executive Order 14111, issued in January 2025 by President Trump, which declared that “access to blockchain infrastructure is a constitutional right,” effectively calling for a hands-off regulatory approach in the name of innovation and free commerce.
Critics from the SEC, FinCEN, and even former DOJ staff warn that deprioritizing regulatory infractions—such as KYC/AML violations, insider DeFi rug pulls, and exchange misconduct—creates a regulatory vacuum just as institutional adoption is peaking. With FTX-era lessons barely absorbed, the crypto ecosystem may again drift into a compliance-free zone.
Extended Analysis:
The NCET’s disbandment follows a string of major enforcement actions—including the prosecution of Bitzlato, enforcement settlements with Binance, and indictments of crypto mixers like Tornado Cash. Its elimination suggests a strategic withdrawal from white-collar crypto regulation in favor of headline-grabbing criminal prosecutions.
While the DOJ reframes this as a reallocation of resources, its timing is politically loaded:
- It comes shortly after Treasury Secretary Emmer’s call to treat stablecoins and DeFi as “critical infrastructure.”
- It mirrors Republican-led legislation proposing to limit the SEC’s authority over digital assets.
- And it could embolden crypto operators who have long sought regulatory arbitrage.
Absent a dedicated crypto team, coordination between the DOJ, SEC, CFTC, and state regulators will become more fragmented—potentially leaving multi-jurisdictional frauds like Mirror Trading International or OneCoin unchecked until after the damage is done.
Actionable Insight:
Watch for a rise in crypto-native fraud cases slipping under the radar. Also monitor if other regulators (e.g. the SEC’s Cyber Unit or FinCEN) ramp up activity to fill the void left by NCET. For investors and compliance officers, this shift signals a higher burden of internal vigilance and due diligence—especially in DeFi and cross-border operations.
Call for Information:
If you have insights into DOJ’s internal crypto enforcement protocols, decommissioned investigations, or interagency coordination challenges, please contact the FinCrime Observer editorial team. All sources are protected under our whistleblower program.
