On April 7, 2025, Deputy Attorney General Todd Blanche issued a memo (the “Blanche Memo”) announcing the Trump administration’s Department of Justice (“DOJ”) refocus of enforcement policies related to investigations and prosecutions of individuals and entities involved with digital assets. Though in many respects a continuation of prior enforcement practices, the Blanche Memo stated that DOJ will forgo “enforcement actions that have the effect of superimposing regulatory frameworks on digital assets” in favor of prosecuting actors who victimize digital asset investors or who use digital assets in furtherance of other criminal offenses, particularly by cartels, terrorists, or other transnational criminal organizations.
DOJ’s stated priorities are consistent with the administration’s goal to develop a regulatory framework designed for digital assets and to forgo “regulation by enforcement,” as outlined in Executive Order 14178, “Strengthening American Leadership in Digital Financial Technology.”
The Blanche Memo makes clear that DOJ is by no means walking away from digital asset enforcement. Indeed, as the administration’s approach fosters increased use of cryptocurrency and digital assets, criminal activity in these channels may expand, requiring continued scrutiny and enforcement. The memo emphasizes the need to hold accountable both primary wrongdoers and, to the extent applicable, those entities that understand their regulatory obligations and willfully violate those requirements.
Takeaways
- As the volume of cryptocurrency transactions grows, DOJ enforcement in this area may actually increase, as bad actors will likely exploit this growth as a means of furthering criminal schemes that harm investors and victims of fraud schemes, among others.
- DOJ will not investigate virtual currency exchanges, mixing services, or offline wallets for crimes stemming from regulatory violations, except where there is evidence of knowing and willful violations of the law by these entities. That does not mean that exchanges and other intermediaries in the digital asset space are off the hook. DOJ will likely continue to scrutinize actions by digital asset exchanges and other entities where they knowingly and intentionally harm digital asset investors and customers, or facilitate other types of crime.
- Regulatory violations—including unlicensed money transmitter operations under 18 U.S.C. 1960, Bank Secrecy Act violations, and securities and commodities registration requirements—will not be charged, according to the Blanche Memo, absent evidence that the actor was aware of the licensing or registration requirements and then acted willfully to violate the regulations.
- For the Bank Secrecy Act, this is consistent with a number of prior high-profile DOJ prosecutions, such as those involving BTC-e or Bitcoin Fog, where violations of Section 1960 were charged in conjunction with Section 1956 violations, demonstrating knowledge and intent to commit money laundering.
- For the securities and commodities statutes, the memorandum re-states the law—that only willful violations, meaning those where knowledge and intent can be shown, can be charged criminally.
- DOJ will not bring charges alleging securities or commodities fraud where adequate criminal charges for mail or wire fraud already exist without prior approvals by the Deputy Attorney General or existing consensus that the token at issue is a security or commodity. This is consistent with DOJ’s general prior practice of deference to the Securities and Exchange Commission (“SEC”) or the Commodity Futures Trading Commission (“CFTC”)[1] on charging violations of securities and commodity statutes.
Enforcement Priorities and Charging Considerations
The Blanche Memo instructs DOJ prosecutors to focus on cases involving embezzlement, misappropriation of funds, digital asset scams, and hacking incidents that result in significant financial theft. Additionally, DOJ is directed to prioritize efforts to address the use of digital assets by cartels, terrorist organizations, and other criminal enterprises, which have increasingly used cryptocurrencies to finance activities such as terrorism, narcotics trafficking, and organized crime. This focus aligns with DOJ’s approach to digital assets with its broader efforts toward the “total elimination” of such organizations.
Importantly, DOJ will refrain from charging virtual currency exchanges, mixing and tumbling services, and offline wallets for acts of their end users or unwitting regulatory violations, unless such investigations implicate the revised priorities outlined above.
In addition to the Blanche Memo’s clarification that regulatory violations should only be pursued if there is compelling evidence that the violations were knowing and willful, prosecutors are also advised to avoid charging violations of the Securities Act of 1933, the Securities Exchange Act of 1934, and the Commodity Exchange Act if it would require litigating whether a digital asset is a “security” or “commodity.” Exceptions to this guideline require approval from the Deputy Attorney General, who will consider factors such as the widespread acceptance of the asset as a “security” or “commodity” and the availability of alternative charges such as mail or wire fraud.
Victim Compensation
DOJ is also directed to take steps to improve compensation mechanisms for victims of digital asset fraud. Current regulations often limit victims to recovering the amounts at which their assets were valued at the time of the fraud, potentially excluding them from benefiting from later market gains. To address these challenges, the Blanche Memo tasks the Office of Legal Policy and the Office of Legislative Affairs with evaluating and proposing legislative and regulatory changes to enhance asset forfeiture efforts and ensure fair compensation for victims.
Department Resources
The Blanche Memo also announces several organizational changes to the DOJ. The memo officially dissolves the National Cryptocurrency Enforcement Team (“NCET”) and explains that, instead, the Computer Crime and Intellectual Property Section (“CCIPS”) will continue to advise on policy, enforcement, and training. Launched in 2022, NCET combined expertise from the Money Laundering and Asset Recovery Section (“MLARS”) and CCIPS to investigate and prosecute cryptocurrency cases. NCET previously played a key role in some of DOJ’s highest‑profile crypto prosecutions, such as Tornado Cash and BTC-e, and served as DOJ’s source of institutional knowledge regarding digital assets. This change may be less significant, however, since NCET had already been merged with CCIPS in July 2023.
The Blanche Memo also instructs the Market Integrity and Major Frauds Unit, a component of the Fraud Section within DOJ’s Criminal Division, to cease cryptocurrency enforcement efforts and to focus on other priorities, such as immigration and procurement fraud.
While NCET is disbanded and the Fraud Section will focus on other cases, traditional parts of DOJ that investigate and prosecute crypto-related crimes—such as the many different U.S. attorney’s offices, CCIPS, and MLARS—remain to pursue these cases. Given the Blanche Memo’s repeated emphasis on abuses of digital assets and redressing harm to victims, DOJ appears likely to continue to prosecute its crypto-related cases with greater emphasis on users, hackers, traffickers, and organized crime, but with less emphasis on exchanges and service providers.
Conclusion
While the Blanche Memo outlines new policies and priorities for the DOJ in the digital asset arena, we can expect continued cryptocurrency enforcement actions reflective of the policy shift focusing more on the uses of cryptocurrency and less on service providers in the industry.
ENDNOTE
[1] Notably, CFTC Acting Chairman Caroline D. Pham also recently announced that, in alignment with the Blanche Memo, CFTC attorneys are directed to eschew prosecution of regulatory violations in digital asset cases unless there is evidence that the violation was knowing and willful. See “Acting Chairman Pham Lauds DOJ Policy Ending Regulation by Prosecution of Digital Assets Industry and Directs CFTC Staff to Comply with Executive Orders,” Release No. 9063-25, April 8, 2025, https://www.cftc.gov/PressRoom/PressReleases/9063-25. Acting Chairman Pham’s announcement indicates that the CFTC will focus its efforts on charging regulatory violations only where the conduct qualifies as a criminal felony violation of the Commodities Exchange Act, which requires a willful violation of the Act. See 7 U.S.C. § 13(a)(2).
This post comes to us from Morrison & Foerster LLP. It is based on the firm’s memorandum, “The Department of Justice Announces New Enforcement Policy for Digital Assets,” dated April 10, 2025, and available here.