Trump Administration’s New Stance on Cryptocurrency Regulation
The Trump administration has dissolved a unit in the Ministry of Justice that was responsible for investigating cryptocurrency breaches, criticizing the previous approach as too aggressive against the rapidly growing industry. In a memo published late Monday, the deputy attorney general condemned predecessors for investigating cryptocurrency operators in a way that was "poorly designed and poorly executed".
New Focus on Specific Crimes
Instead, the department has been instructed to narrow its focus on cryptocurrency investigations to crimes such as fraud, drug trafficking, and terrorism. This new approach aligns with President Trump’s broad embrace of the crypto industry during his campaign and in office, as he moves to relax enforcement.
Relaxation of Enforcement
The Trump family has expanded its business interests in the industry, including the establishment of a crypto company. The Trump Media & Technology Group, a social media company in which Trump is the majority shareholder, has stated that it plans to introduce a number of investment products for digital assets this year.
Similar Steps in the Securities and Exchange Commission
The directive from the Ministry of Justice follows similar steps in the Securities and Exchange Commission, which has rejected lawsuits and pending investigations involving crypto companies that had not registered as stock exchanges. The regulatory authority has also drastically lowered the staffing of a crypto enforcement unit and announced that it would not regulate certain digital assets.
Criticism of Previous Approach
In the memo, the Ministry of Justice accused predecessors of a "ruthless strategy of regulation through criminal prosecution" in the world of digital currencies. The new approach aims to restore trust in the safety of digital assets and promote the growth of the digital wealth industry.
New Guidelines for Prosecutors
Public prosecutors are now instructed to only pursue cryptocurrency cases involving victim reserves, fraud, hacking, and the use of crypto to finance other crimes such as fentanyl or human trafficking. The goal is to restore stolen funds to customers and build trust in the industry.
Dissolution of the National Cryptocurrency Enforcement Team
The National Cryptocurrency Enforcement Team, a group created in recent years to handle cryptocurrency cases, has been dissolved. Individual US attorneys can still pursue cases involving cryptocurrency investigations, but the new approach seems to prevent cases that may be seen as overly aggressive.
