- The DOJ just disbanded its task force targeting cryptocurrency fraud.
- This aligns with Trump's interest in strengthening America's cryptocurrency industry, which he had previously promised campaign donors he would do.
- Other government agencies and independent regulators will now prosecute cryptocurrency-related crimes. Are there any preventative measures Americans can take to avoid getting scammed in the first place?
U.S. Deputy Attorney General Todd Blanche instructed the Department of Justice to no longer pursue cryptocurrency fraud cases in a memo issued Monday night, leaving such cases to financial regulators instead.
The memo disbanded the National Cryptocurrency Enforcement Team, or NCET, which the Biden administration created in 2022 to target cryptocurrency where it was involved with cybercrime and money laundering.
Blanche called the work performed by the team “a reckless strategy of regulation by prosecution, which was ill-conceived and poorly executed.”
Blanche charged the DOJ to instead prioritize investigations into “individuals who victimize digital asset investors, or those who use digital assets in furtherance of criminal offenses such as terrorism, narcotics and human trafficking, organized crime, hacking, and cartel and gang financing.”
The is a move toward fulfilling President Donald Trump’s campaign pledge to deregulate crypto companies. His promise to make the United States the “crypto capital of the planet” secured him support from technology giants.
Are Americans at risk for cryptocurrency scams?
The Federal Bureau of Investigations reported that Americans lost over $5.6 billion in 2023 due to investment scams and cybercrimes associated with bitcoin, ether and tether cryptocurrency — up 45% from 2022. The $5.6 billion in losses made up nearly half of the total amount Americans lost to financial crimes.
“Over the years, cryptocurrency’s widespread promotion as an investment vehicle, combined with a mindset associated with the ‘fear of missing out,’ has led to opportunities for criminals to target consumers and retail investors,” reads the FBI report.
Cryptocurrency regulation nevertheless hampered innovation and investment in the crypto sector. And the removal of NCET does not entirely deregulate the industry — it just refocuses the DOJ on other kinds of financial crime.
Though Trump called cryptocurrency dangerous during his first presidential term, he and his family now have an interest in the industry. Ahead of his 2025 inauguration he launched “meme coin” tokens $TRUMP and $MELANIA. The Trumps also claim 75% net revenues from token sales from crypto business World Liberty Financial.
Be on the lookout for cryptocurrency scams
As cryptocurrency becomes more and more visible in the modern market, consumers should be increasingly cautious of scams. Following are several steps Americans can take.
- Don’t engage with messages from people you haven’t met in person, including people who claim to represent your bank or government agencies. Research the organization and the individual who is messaging you. If you can’t tell if the message is legitimate, try calling the organization, or don’t respond at all.
- Be careful of what sites you visit on the Internet and what information you give them. Some sites will impersonate businesses and banks. Check domain names and watch out for spelling errors. These are signs of illegitimacy.
- Beware of FOMO, or the “fear of missing out” mentioned by the FBI report. It’s very tough to get rich quickly — and fraudsters are happy to use this knowledge against you. If an investment opportunity sounds too good to be true, it just may be.