Good News for Cryptocurrencies from the US Department of Justice! Altcoins Can Be Affected!

A recent memo from the U.S. Department of Justice (DOJ) has caused a stir in the cryptocurrency industry, signaling a major policy shift under President Donald Trump's administration. The memo outlines the retreat of aggressive enforcement strategies adopted during the Biden era.

The DOJ memo released last week clearly distances the department from the previous administration's "regulation by judgment" approach. Instead, it confirms that the DOJ will no longer pursue cases that impose regulatory frameworks on digital assets; That task, he says, rests with agencies explicitly tasked with overseeing the industry.

"The Department of Justice is not a digital asset regulator," Assistant Attorney General Todd Blanche said in the document, adding, "The previous administration used the Department of Justice to pursue a reckless strategy that was poorly conceived and poorly executed."

Going forward, the Department of Justice will focus on prosecuting cases where investors are directly harmed or digital assets are used in crimes such as terrorism or cyberattacks. The note clearly states that market brokers, which are platforms that facilitate crypto transactions, will not be targeted unless they are used by malicious people for illegal purposes.

As part of the policy overhaul, the DOJ (NCET) disbanded the National Cryptocurrency Enforcement Team, which was established in 2022 to support prosecutions involving crypto-related crimes.

Legal experts say the memo could significantly impact ongoing litigation. "There are a number of investigations and prosecutions that would not be opened today if this guideline had been followed," Samson Enzer, a partner at Cahill Gordon & Reindel LLP and a former federal prosecutor, said in an interview, adding, "I predict that the investigations would be closed and possibly some of the charges would be dropped."

Enzer added that defense lawyers have already referenced this note in their calls for prosecutors to drop the ongoing investigations.

One of the highest-level cases potentially affected is that of Do Kwon, the founder of Terraform Labs, who is facing numerous federal charges, including conspiracy to launder money. Kwon's attorney brought up the DOJ's memo during a recent hearing, suggesting that it could support pretrial motions. But prosecutors said they have no plans to change the charges, which carry a prison sentence of up to 130 years.

Katherine Reilly, Pryor Cashman's partner and a former federal prosecutor, said the memo could affect some prosecutions, but high-level cases like Kwon's probably won't. "I don't think there's anything in this case that contradicts the structures laid out by the proclamation," he said.