DOJ Under Political Firestorm After Abolishing Crypto Crime Unit
The U.S. Department of Justice has come under criticism from Senate Democrats after the discontinuation of its National Cryptocurrency Enforcement Team (NCET), a crucial department that handled well-known digital asset crimes.
Warren Leads Democratic Backlash
On April 10, Senator Elizabeth Warren and six other Senate Democrats penned a scathing letter to Deputy Attorney General Todd Blanche, condemning the DOJ’s move as “nonsensical” and a “gift to cryptocurrency money launderers.” They urged the department to reverse what they termed as a misguided and dangerous policy shift.
DOJ Defends the Shutdown
Blanche’s April 7 memo announced the official termination of NCET. In it, he argued that the DOJ is “not a digital assets regulator” and denounced the previous strategy as a “reckless strategy of regulation by prosecution.” The DOJ will now focus less on crypto exchanges, mixers, and custodial wallets and more on persons who directly defraud investors.
Democrats are adamant in their opposition to the change, cautioning that it may undermine enforcement of sanctions evasion, drug trafficking, and child exploitation—frequently enabled by crypto mixers that obfuscate illicit fund flows.
NCET’s Key Role in Crypto Enforcement
Established in 2021, NCET was a central part of prosecuting complex crypto-enabled crimes. It prosecuted the Tornado Cash case, a website used to launder hundreds of millions of dollars, and helped facilitate many multimillion-dollar asset forfeitures. Members of Congress argue that shutting down the unit significantly hampers the DOJ from evolving to stay ahead of new threats in the crypto space.
Issues Around Bank Secrecy Act Enforcement
The Senators also criticized the DOJ for downgrading the prosecution of Bank Secrecy Act violations as it weakens federal anti-money laundering protections. The Senators warned that the policy shift increases the ease with which fraudsters, terrorists, and narcotics traffickers can use digital assets with lesser federal prosecution risk.
Trump Ties Raise Red Flags
The letter inquired whether politics, that is, Donald Trump’s growing involvement in crypto, played a role in the DOJ’s action. Ventures like World Liberty Financial, which has links with the Trump family, have been queried regarding conflicts of interest and regulatory attention.
Call for Action
“We urge you to rescind these decisions,” the lawmakers said, requesting a staff-level briefing by no later than May 1. In the midst of fiery controversies surrounding crypto regulation, the DOJ action is stoking an intensifying wider political battle over how enforcement of digital assets will evolve in the future.
