The U.S. Department of Justice has announced new guidelines to halt investigations and criminal prosecutions of cryptocurrency exchanges, mixers, and offline wallets.
This has led to various reactions in the cryptocurrency community. Some are happy about the freedom of business, while others are concerned about the potential increase in fraud and criminal money laundering.
DOJ Stepping Back from Cryptocurrency
U.S. financial regulatory bodies have become more crypto-friendly since the Trump presidency. The SEC is reviewing guidelines, and the FDIC is working to prevent future de-banking. The political atmosphere is also changing.
Today, the Department of Justice (DOJ) issued a statement announcing that it will no longer investigate cryptocurrency-related institutions.
"The Department of Justice will not engage in regulation through prosecution in this area. Specifically, the Department will no longer target virtual currency exchanges, mixing and tumbling services, and offline wallets for the actions of end-users or regulatory violations," the DOJ's statement claimed.
The DOJ's statement applies to cryptocurrency exchanges, wallets, and cryptocurrency mixers like Tornado Cash. This is based on the previous announcement made today, claiming to have dismantled the national cryptocurrency enforcement team.
The Department of Justice is leaving room to prosecute individual criminals only in specific situations.
The U.S. Department of Justice is notorious for leading large-scale criminal investigations into cryptocurrency exchanges like Binance and KuCoin. The significant investigation into Binance and prosecution led to a record $4.3 billion settlement in 2023.
However, the Department of Justice is now stepping back from cryptocurrency. According to today's announcement, it will immediately cease ongoing investigations into these institutions.
We will wait to see what happens with the Tornado Cash and Samourai Wallet prosecutions. But the memo from the Deputy Attorney General yesterday is right on target: we should be going after bad guys. Not the developers of good tools that bad guys happen to use. pic.twitter.com/h8taM5BvGm
— Peter Van Valkenburgh (@valkenburgh) April 8, 2025
Additionally, it will not pursue legal liability against developers of code used by others to commit crimes and has terminated all active investigations.
While the DOJ was expected to reduce cryptocurrency enforcement under Trump, the completely hands-off decision surprised the cryptocurrency community. Following this news, Tornado Cash (TORN) surged nearly 10% today.
The Department of Justice has requested regulatory agencies review victim compensation laws. This can be seen as a victory for cryptocurrency but may also enable future financial crimes.
Will Cryptocurrency Crime Flourish?
Cryptocurrency detective ZachXBT recently claimed that North Korean activity is "notable" in DeFi. If the Department of Justice turns a blind eye to these exchanges and mixers, it could enable serious violations.
When the announcement first came out, cryptocurrency Twitter was filled with users declaring "crime is now legal".
Moreover, the industry might be testing its luck with this dramatic move. Cryptocurrency fraud is currently at pandemic levels, and the market is highly uncertain.
The Department of Justice is disabling its ability to target criminals in exchanges and mixers, with almost no guarantee of law enforcement. This could remove crucial safeguards to prevent future disasters.
"Crypto lobby: 'Of course, Trump is dismantling the crypto enforcement team, instructing key fraud prosecutors not to prosecute crypto cases, and trying to exempt crypto platforms from banking secrecy laws, but they wrote that they care about stopping crypto crime here! Deny the evidence of your eyes and ears!'" cryptocurrency researcher Molly White claimed.
Overall, it will be difficult to fully predict the impact of these guidelines on exchanges. For now, many cryptocurrency-related companies will gain the freedom to operate as they see fit.
Let's hope business proceeds as usual without serious controversy.
