DOJ will no longer prosecute cryptocurrency fraud
theverge.com
theverge.com
Not targeting exchanges for actions of their users in particular is an unambiguously good thing. I thought people here were pro not targeting media platforms for user comments, or file exchange protocols for what users are sharing?
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It’s still prosecuted just without result.
Maybe it's still worth preventing: I'd prefer to know what kind of activity I've enabled when I accept somebody's money. Just if so, it's under a different label.
"Instead of policing crypto platforms and exchanges, Trump’s DOJ will “focus on prosecuting individuals who victimize digital asset investors..."
Clearly there has been a shift in policy but the headline seems misleading at the very least.
Good luck finding those individuals.
"The department [DOJ] won't pursue cases it feels are better left to financial regulators, focusing instead on crimes committed with cryptocurrency."
Correct me if I'm wrong, but this doesn't feel all that out of the ordinary. The SEC normally prosecutes exchanges. The previous US administration (Biden) created a special team in the DOJ to target cryptocurrency exchanges in the wake of FTX. The new administration (Trump) disbanded the team to refocus DOJ on other priorities, primarily terrorism, including crimes committed with cryptocurrency. SEC and other agencies will still police exchanges. It feels a bit of a leap to say fraud is now legal. Probably not a leap to say Trump is pro crypto since he seems obsessed with overall market stats.
The SEC needs to clarify it's rules around crypto. AFAIK, it's been a mess for years with a lot of uncertainty around how to operate.
Here's a random article from CNBC that explains it in more detail: https://www.cnbc.com/2025/04/08/doj-ends-crypto-enforcement-...
I suppose I can expect this comment to get downvoted. But if we keep overreacting to everything Trump does, we'll likely miss the bigger abuses of power. It would be nice to be able to discuss biz policies once again without the flame wars. The recent policy shift from being hostile to crypto to being more collaborative seems a good thing. And yes, we need to keep a close eye on where this goes because people will try to exploit it with fraud.
We've had to ask you this before.
"Regulation by enforcement" has been a real thing and a bad thing. You can't expect people to obey the law if you won't tell them what it is.
I would like to see the government prosecute actual fraud, so if the article goes on to say they will not prosecute that, then maybe the headline is accurate.
> You can't expect people to obey the law if you won't tell them what it is.
Good thing this wasn't happening with crypto fraud. Wire fraud is pretty much the same even with blockchain.
That's an excuse the crypto community dreamed up. The SEC's position, pre-Trump, was quite clear: crypto assets are securities. File an S-1, as you would for an IPO, with all the usual disclosures, under penalty of perjury. A very few crypto issues did that.
This new statement is mostly about crypto "exchanges". Pure exchanges aren't so bad. At no point in a trade does the NYSE own the asset. It's that crypto exchanges are usually not just exchanges, but brokers, dealers, custodians, and lenders. All of which can lose assets.
Actual memo: [1] It doesn't really change much. Frauds against investors can still be prosecuted.
> Prosecutors should not charge regulatory violations in cases involving digital assets— including but not limited to unlicensed money transmitting under 18 U.S.C. § 1960(b)(1)(A) and (B), violations of the Bank Secrecy Act, unregistered securities offering violations, unregistered broker-dealer violations, and other violations of registration requirements under the Commodity Exchange Act-unless there is evidence that the defendant knew of the licensing or registration requirement at issue and violated such a requirement willfully. This priority is not required by law, but is being imposed as a matter of discretion, in recognition of the Justice Department’s priorities and the fact that the Biden Administration created a particularly uncertain regulatory environment around digital assets.
> Prosecutors should not charge violations of the Securities Act of 1933, the Securities Exchange Act of 1934, the Commodity Exchange Act, or the regulations promulgated pursuant to these Acts, in cases where (a) the charge would require the Justice Department to litigate whether a digital asset is a “security” or “commodity,” and (b) there is an adequate alternative criminal charge available, such as mail or wire fraud.
The memo redirects priorities to, "...embezzlement and misappropriation of customers’ funds on exchanges, digital asset investment scams, fake digital asset development projects such as rug pulls, hacking of exchanges and decentralized autonomous organizations resulting in the theft of funds, and exploiting vulnerabilities in smart contracts." It also prioritizes prosecution of people and organizations who use cryptocurrency to further terrorism, human trafficking, narcotics, organized crime, and hacking. Lastly, it disbands the National Cryptocurrency Enforcement Team and folds them back into Computer Crime and Intellectual Property, which is how the DOJ was organized in 2021.
The only prosecution I can think of that wouldn't happen under these new rules is that of Roman Storm, who is facing up to 45 years in prison for developing Tornado Cash, an open source decentralized cryptocurrency tumbler. The DOJ is not claiming that Storm engaged in money laundering or that he ran a service that allowed people to do so. He is being prosecuted because other people used the software to commit crimes. This is an obvious free speech issue, which is why the EFF filed an amicus brief in support of Storm.[2]
2. https://www.yahoo.com/news/digital-rights-group-eff-calls-05...