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The Justice Department has started dismantling a unit that investigated crypto-related scams, claiming it was not their job to regulate the sector.
The crypto community was elated to hear that the digital asset markets had recovered 7% in price after several weeks of steep declines.
During his campaign, Donald Trump promised to disband the DoJ’s crypto-enforcement unit in order to reduce the oversight of the digital assets sector.
In a four-page document, Todd Blanche, Deputy Attorney General of the Department of Justice said that “the Department of Justice does not regulate digital assets.” memo He sent it to the prosecutors last week. “The National Cryptocurrency Enforcement Team(NCET) will be disbanded with immediate effect.”
Blanche, Trump’s lawyer in the 2024 trial that led to his conviction on 34 felony counts of falsifying financial records, stated: “The digital assets sector is critical to our nation’s economic growth and innovation.”
The measure is a Trump administration objective to bolster the cryptocurrency sector by reversing Joe Biden’s crackdown on the industry´s alleged criminals and positioning the US as the leading crypto hub worldwide.
Trump’s crypto promises also led the Securities and Exchange Commission to suspend its high-profile case against Binance – the world’s biggest crypto exchange – two months ago.
Binance was dealt a major blow by the SEC under Biden last year. The SEC accused Binance of mishandling users’ funds and violating securities law, which led to Zhao Changpeng being jailed for four months, until September last year.
The recklessness of regulatory strategies
Blanche accused Biden’s administration of using DoJ as a “reckless strategy of regulation through prosecution, which was poorly conceived and executed.”
The DoJ’s attorney general stated that the DoJ would continue to pursue individuals and organizations who use cryptocurrency to defraud investors, fund criminal activity such as human trafficking or terrorism or to finance criminal activities. However, the DoJ will never stifle growth and innovation in the crypto sector.
The crypto and Blockchain community, who donated millions to help Trump get the presidency, has long complained about the Biden administration unfairly pursuing innocent people through criminal or civil enforcement action.
Blanche’s memo is praised on XPeter Van Valkenburgh is the executive director of Coin Center, a group that advocates for cryptocurrency. He said: “We should target bad guys. “We should be going after bad guys, not the developers of tools that good guys use.”
Tim Miller is an MSNBC analyst who declared Trump to be a dissident. tweeted on X About the memo that suggests the DoJ measure is a scheme run by the president. He says, “is running an anonymous crypto scam in which he can earn millions of dollars.”
He said: “Truly, no corruption scheme of this kind in our history. At least not out of the White House.”
Crypto Markets Continue to Be Bearish
Bitcoin reached a record-breaking high of $109,000 on Trump’s first day of office, January 20, 108 years ago. The cryptocurrency industry was buzzing with excitement. BTC’s price has fallen to $75,000 in recent days, but it rose again on Wednesday. This is a result of the DoJ news.
Ethereum (ETH), which is the second most valuable cryptocurrency in terms of market cap, has dropped by 22%, to lows around $1400s, in the last 7 days, due to global economic concerns across the crypto markets. According to CoinMarketCap Since then, it has recovered over 10% and is now over $1600.
CMC’s website states that since Donald Trump assumed office in January 2025, crypto market capitalisation dropped yesterday by more than $1.2 trillion to $2.45 billion. Since then, it has recovered 6.56% its value and is now worth $2.6 trillion.
There is more to come volatility ahead
According to Coindesk, the most popular website in the crypto industry, the bitcoin price (BTC) is likely to be more volatile, after it has dropped below $75,000 twice over the last week. It could still fall due to the economic uncertainty caused by Trump’s trade war.
Investing.com says Bitcoin’s sharp drop “largely wiped out a recent recovery as U.S. president Donald Trump’s steep tariffs on trade took effect, causing widespread losses in the financial markets.”
The news outlet reported that investors fear a potential trade war which could lead to a loss of risk appetite on traditional markets and crypto ones.
We’ll have to wait and see if Trump’s crypto-related promises during his campaign will be beneficial to the digital assets industry, or just another one of his business schemes to advance his interests. The cryptocurrency market, however, has not reacted as many experts expected.
