Trump signs order establishing strategic Bitcoin reserve
President Trump signed an order Thursday to create a federal Strategic Bitcoin Reserve, signaling new federal support for cryptocurrency in general and Bitcoin in particular.
Scripps News
WASHINGTON – The Justice Department has shut down its unit that investigates cryptocurrency fraud “effective immediately,” even as the Trump administration ramps up its embrace of the emerging digital currency market, according to a memo by Deputy Attorney General Todd Blanche.
In a memo sent Monday night, Blanche directed the closure of the National Cryptocurrency Enforcement Team and ordered prosecutors to pivot to investigating transnational criminal organizations and terrorist groups that use crypto to engage in illicit transactions.
The move is one of several efforts by the Trump administration to scale back enforcement of white-collar and financial crimes and divert the resources to fighting drug traffickers and immigration-related human smugglers.
In his four-page memo, Blanche said the new order was meant to bring the Justice Department in line with Trump’s own Executive Order 14178, which decreed that clarity and certainty regarding enforcement policy “are essential to supporting a vibrant and inclusive digital economy and innovation in digital assets.”
Blanche, one of several Trump criminal defense lawyers at the top ranks of DOJ, said the president “has also made clear that ‘[w]e are going to end the regulatory weaponization against digital assets.’ “
“The Department of Justice is not a digital assets regulator,” Blanche wrote. “However, the prior Administration used the Justice Department to pursue a reckless strategy of regulation by prosecution, which was ill conceived and poorly executed.”
Public corruption and transnational crime experts warned that shutting down the unit could divert critical resources from efforts to stop criminals and corrupt regimes from using cryptocurrency for illicit gain, even as Trump claims he wants to crack down on them.
“Dangerous US adversaries rely on cryptocurrencies to launder money and evade sanctions,” said Nate Sibley, an anti-corruption expert and director of the Kleptocracy Initiative at the conservative Hudson Institute think tank in Washington, D.C., in a post on X “If this is accurate, hard to see how it squares with – for example–cracking down on cartel finances or maximum pressure sanctions on Iran.”
Created in 2022 to address the challenges posed by cryptocriminals
The National Cryptocurrency Enforcement Team (NCET) was established in February 2022 to address the challenge posed by the criminal misuse of cryptocurrencies and digital assets.
According to its website, the team is composed of attorneys from across the Justice Department, including prosecutors with backgrounds in cryptocurrency, cybercrime, money laundering and forfeiture. It worked in close collaboration with components across the DOJ, as well as U.S. Attorneys’ offices around the country and FBI crypto-crime specialists.
One of its primary focuses was prosecuting the criminal use of digital assets with a particular focus on virtual currency exchanges and other entities that facilitate criminal activity. It also set strategic priorities regarding digital asset technologies and led the DOJ’s efforts to coordinate with domestic and international law enforcement partners, regulatory agencies and private industry to combat the criminal use of digital assets.
Letting Trump’s ‘actual regulators do this work’
The deputy AG said the Justice Department will no longer pursue litigation or enforcement actions that have the effect of superimposing regulatory frameworks on digital assets “while President Trump’s actual regulators do this work outside the punitive criminal justice framework.”
Instead, Blanche wrote, the DOJ will focus its investigations and prosecutions involving digital assets on going after individuals “who victimize digital asset investors” and those who try to use crypto to further criminal schemes like terrorism, narcotics and human trafficking, organized crime, hacking, and cartel and gang financing.
Consistent with that narrowing of its cryptocurrency enforcement policy, the DOJ Market Integrity and Major Frauds Unit will also cease cryptocurrency enforcement to focus on other administration priorities, including immigration and procurement fraud, Blanche said.
Also, the DOJ Criminal Division’s Computer Crime and Intellectual Property Section will continue to provide guidance and training to Department personnel and serve as liaisons to the digital asset industry, according to Blanche’s memo.
Making the U.S. the ‘crypto capital of the planet’
President Donald Trump‘s executive order on cryptocurrency on Jan. 23 – his third day in office – sought to jumpstart government regulation that he said could help make the U.S. “crypto capital of the planet.”
On the campaign trail, Trump courted major players in the cryptocurrency sphere and promised to scale back what he considered to be overenforcement and regulation of the industry. That won him significant campaign contributions from digital currency firms and investors, many of whom had complained about what they said were aggressive efforts by the Biden administration to regulate the emerging market.
Trump also co-founded the World Liberty Financial firm two months before his election victory in November, along with his three sons and the wealthy real estate businessman Steve Witkoff, who is now Trump’s Middle East envoy.
Trump issued his own crypto token
Trump also issued his own crypto token just before taking office, which soared to more than $10 billion in market value, and enthusiasm over his crypto-friendly administration helped briefly lift Bitcoin and other cryptocurrencies to record levels.
Trump’s so-called “memecoin” surged from less than $10 on the Saturday before his inauguration to as high as $74.59 before eventually giving up some of its gains. The token, branded $TRUMP, has been criticized by ethics experts as a conflict of interest for the president since the company could likely benefit from his pro-crypto policies.
Since taking office, Trump has pushed pro-cryptocurrency efforts, including establishing a Digital Asset Markets working group to propose new digital asset regulations and to look into creating a national cryptocurrency stockpile.
Creating a Strategic Bitcoin Reserve
Last month, Trump signed an order to create a federal Strategic Bitcoin Reserve, signaling new federal support for cryptocurrency in general and Bitcoin in particular.
Its members included Treasury Secretary Scott Bessent, White House A.I. and Crypto Czar David Sacks, along with “heads of other relevant departments and agencies,” including the chairman of the Securities and Exchange Commission.
As a result, cryptocurrencies like Bitcoin will likely become more mainstream and possibly used for payment, just like credit and debit cards.