On April 7, 2025, Deputy Attorney General Todd Blanche published a new memorandum, “Ending Regulation by Prosecution,” detailing the DOJ’s new approach towards digital assets. Calling the DOJ’s prior prosecutions “a reckless strategy of regulation by prosecution,” the memorandum details the DOJ’s new approach to prosecuting crimes involving digital assets.
Going forward, the DOJ “will no longer target virtual currency exchanges, mixing and tumbling services, and offline wallets for the acts of their end users or unwitting violations of regulations,” especially where such prosecutions would be “based on diffuse decisions made at the lower levels” of those companies. Further, the DOJ will no longer focus on regulatory violations (like BSA or money transmitting activities) or violations of the Securities Act, Securities Exchange Act, and the Commodity Exchange Act.
Rather, the memorandum clarified that future prosecutions involving digital assets should target fraud-focused offenses, conduct that causes financial harm to investors, or the use of digital assets in the course of other criminal conduct—especially areas prioritized by the administration such as drug trafficking, terrorism, cartels, and human trafficking and smuggling.
Takeaway
Although this guidance marks a shift in stated policy from the prior administration’s stance toward prosecutions of crypto-related activities, practically speaking it may not result in significant changes. The DOJ does not often bring prosecutions for purely regulatory offenses. For example, prosecutions involving digital assets have often not asserted charges for securities fraud, instead choosing to assert wire fraud charges, which the memorandum still allows. Moreover, a very recent effort to invoke the Blanche memorandum to forestall a criminal trial involving crypto assets failed. See United States v. Karony, 23-cr-433 (E.D.N.Y.) (involving a trial of a SafeMoon executive).
