DOJ Disbands Cryptocurrency Enforcement Team
Earlier this month, it was announced that the U.S. Department of Justice’s (DOJ) National Cryptocurrency Enforcement Team that targeted cryptocurrency crimes was being disbanded as the new Administration shifts its focus on how to regulate cryptocurrency. “The Department of Justice is not a digital assets regulator,” Deputy Attorney General Todd Blanche said in a memo announcing the decision to reassign the team of prosecutors responsible for the criminal prosecutions of the cryptocurrency industry. Instead of focusing these prosecutions on the industry itself, frequently investigating civilly and criminally individuals and companies for what they believed were financial or securities violations, the DOJ will target individuals and companies that scam crypto investors or use cryptocurrency to fund criminal conduct such as human trafficking, the drug trade or terrorism. “We should be going after bad guys. Not the developers of good tools that bad guys happen to use,” Peter Van Valkenburgh, the executive director of the advocacy group Coin Center, in advocating for the new direction of the DOJ, which will also see the Market Integrity and Major Frauds Unit “cease cryptocurrency enforcement in order to focus on other priorities, such as immigration and procurement fraud” according to the memo.
Trump Hosts First “Crypto Summit” With Industry Leaders
Last month, President Trump hosted a White House first-of-its-kind summit focusing on cryptocurrency with industry leaders and announcing preliminary plans on how to build a national strategic reserve of digital assets. Trump had signed an executive order that directed the Secretary of Treasury and Secretary of Commerce to develop “budget-neutral strategies” that have no “incremental costs” on taxpayers for acquiring Bitcoin and other digital currencies. White House crypto czar David Sacks said in a social media post that the government could achieve this through securing and holding onto bitcoin that has been subject to a criminal or civil asset forfeiture proceedings, enabling the government to build reserves through what it believes are ill-gotten gains by individuals and companies. Still, questions remain about how the federal government is going to regulate the industry going forward, although many industry leaders welcomed the opportunity to have their opinions heard on the matter. “What everyone really needs to have at this point is clarity on what the level of scrutiny and intensity of regulation will be, who the key regulators will be,” said Yesha Yadav, associate dean and professor of law at Vanderbilt University. As the federal government becomes more involved and connected to the industry, expect there to be further clarifications and the possible proliferation or growth of the industry on the whole.
