In a policy change that could reshape the regulatory landscape for digital asset companies, the US Department of Justice (DOJ) has announced a significant narrowing of its approach to prosecuting cryptocurrency firms.

A memorandum circulated by Deputy Attorney General Todd Blanche outlines that the department will no longer pursue criminal charges against exchanges, wallet providers, or other intermediary providers based solely on the actions of their users.

This marks a departure from previous cases in which crypto platforms faced legal consequences after being used, often knowingly, for activities such as money laundering or sanctions evasion. The shift is seen as part of a broader alignment with the Trump administration’s more favorable stance toward the crypto industry.

Under the new policy, prosecutors are instructed to avoid charging firms under statutes that treat cryptocurrency products as securities or regulated financial instruments, unless there is clear evidence of direct misconduct.

Alongside the updated charging policy, the department will dismantle its National Cryptocurrency Enforcement Team, established under President Biden to centralize efforts against illicit crypto activity. Another unit, the Market Integrity and Major Frauds section, will redirect its resources away from digital assets to focus on other enforcement areas.

Nevertheless, the department will continue to pursue criminal cases involving fraud, theft, and organized crime, that use cryptocurrencies.

CFTC shifts strategy

The move comes as the Commodity Futures Trading Commission (CFTC) is realigning its enforcement priorities following the Justice Department’s recent decision.

Acting Chairman Caroline Pham praised the DOJ’s new guidance and instructed CFTC staff to follow suit, in line with Executive Order 14219. The changes direct the agency to avoid regulatory action unless there is clear evidence of willful misconduct, particularly in cases involving registration violations under the Commodity Exchange Act.

Pham emphasized that enforcement resources must be directed toward combating fraud and protecting victims rather than penalizing technical violations by companies operating in an evolving regulatory space.

The CFTC has already begun winding down some initiatives that previously focused on technical compliance issues and is encouraging self-reporting and cooperating among firms. Pham directed staff to deprioritize cases that fall outside the updated enforcement framework.

“I direct the CFTC staff and the Director of Enforcement to not take any litigating position or arguments that do not comply with the President’s executive orders, Administration policy, or DOJ policy on digital assets enforcement priorities and digital assets charging considerations,” said Pham.

The agency has also launched a review of older cases that do not involve fraud or consumer harm, offering firms a path toward resolution.

High-profile crypto cases

Roman Storm, a software engineer behind the crypto-mixing platform Tornado Cash, may stand to benefit from the DOJ’s revised enforcement approach. Storm was charged in 2023 for allegedly facilitating the laundering of over $1 billion in illicit funds, including transactions tied to a North Korean hacking group under US sanctions.

Tornado Cash, like other mixing services, enables users to obscure the origin and flow of digital assets, tools that prosecutors say can be exploited by criminals. Storm has argued that he is being held liable for the actions of third-party users rather than for any direct wrongdoing.

The DOJ memo issued by Deputy Attorney General Todd Blanche states that enforcement should target individuals and organizations directly responsible for criminal acts, not the tools they use, such as mixers or exchanges, unless there is evidence of intent.

Other high-profile crypto enforcement cases may also come under review. For instance, Binance, the world’s largest exchange that pleaded guilty to charges related to inadequate money-laundering controls, can also potentially be affected.

Uncertain terrain

The Justice Department’s narrowing of crypto-related prosecutions, backed by parallel shifts at the CFTC, marks a turning point in the US regulatory enforcement. However, federal policy changes alone won’t resolve deeper concerns about the long-term structure of digital asset regulation.

Lawmakers in Congress are pushing for comprehensive legislation to provide clear, unified guidance for the sector, frustrated that the absence of such a framework has driven companies and capital offshore.

At the state level, regulatory fragmentation remains a key challenge. While some jurisdictions have created stricter licensing regimes for digital asset companies, especially with respect to anti-money-laundering compliance, others have adopted a more permissive stance.

Meanwhile, market volatility casts another layer of uncertainty over the sector. Bitcoin, which had climbed as high as $110,000 after the 2025 inauguration, has dropped sharply in the wake of new trade policies, raising concerns about its role as a long-term store of value.

The convergence of regulatory retreat and legislative momentum represents a rare window of opportunity to redefine the future of digital assets in the United States.

But fragmented state enforcement, global market instability, and investor skepticism will continue to undermine innovation unless federal authorities can deliver not just fewer prosecutions, but a credible and cohesive system that fosters growth while protecting the integrity of financial markets.

The next phase of US crypto policy will hinge less on what is dismantled, and more on what is built in its place.