In case you had any doubts, the golden age of white-collar crime is upon us. The Justice Department announced on Monday that it will stop regulating the digital asset space, instead focusing its efforts on prosecuting crimes that utilize cryptocurrency, like drug and human trafficking.
The news comes shortly after President Trump delivered pardons to individuals in the crypto industry, including Silk Road founder Ross Ulbricht and more recently the leaders of cryptocurrency exchange BitMEX. The founders of that exchange were sentenced to prison for failing to maintain anti-money laundering and identity verification systems. The Justice Department under former President Biden said BitMEX was essentially functioning as a “money laundering platform,” allowing illicit funds to flow without conducting proper diligence.
But now, exchanges like BitMEX will be empowered to conduct schemes without accountability, and criminal operations like North Korea’s infamous hacking teams will be able to launder illicit funds with greater ease. The Justice Department says it will still prosecute people in the crypto industry who defraud investors, though President Trump’s pardoning of Nikola founder Trevor Milton and commutation of Ozy’s Carlos Watson—both of whom blatantly defrauded investors—does not lend that assertion much faith.
According to the Washington Post, Deputy Attorney General Todd Blanche also advised prosecutors that the department would disband its National Cryptocurrency Enforcement Team, which was created in 2022 to “address the challenge posed by the criminal misuse of cryptocurrencies and digital assets.” Cryptocurrencies are a popular new vector for fraud as money can be sent through exchanges with lax scrutiny of clients, whereas in the traditional banking world, any transaction over even $10,000 is scrutinized and banks are careful to investigate the origins of funds. Industry insiders argue that physical cash is a popular method for conducting fraud.
Trump himself is closely tied to the cryptocurrency industry, having minted his own memecoin before the inauguration and, along with his children, founded the crypto venture World Liberty Financial in 2024. The administration announced in March plans to create a “strategic reserve” of cryptocurrency using coins seized in criminal prosecutions, a plan which ostensibly legitimizes the industry, but also received criticism because cryptocurrencies are highly volatile. Selling seized Bitcoins and other cryptocurrencies could net money immediately, whereas the price of cryptocurrencies in the reserve could fall.
Trump’s family has also stockpiled cryptocurrencies ahead of formal announcements by the president on loosening regulation of cryptocurrencies. Eric Trump has insisted that the family does not communicate with the White House regarding its crypto ventures, though it does not really need to—it is evident to anyone how investments made in the cryptocurrency industry by the family stand to gain.
President Trump is going to loosen regulations on the industry, which has not produced anything economically productive and still largely remains a form of gambling and relentless optimism that the price will continue to go up. Even Sam Bankman-Fried conceded in a recent jailhouse interview that cryptocurrencies are still complicated and not useful to everyday individuals. They are great for fraud, though, and the Justice Department’s new mandate will make them even more so. Lax policing should also help prices rise as companies like Coinbase and Robinhood have less standing in the way of offering new products.
The crypto industry has failed to produce anything useful, and spent hundreds of millions in order to elect a president that would keep the price going up. Now they will not go to prison either. It was clearly a good bet.
