President Donald Trump has formalized a pro-cryptocurrency policy, while the U.S. Department of Justice plans to significantly ease the prosecution standards for cryptocurrency corporations. This move contrasts sharply with the aggressive cryptocurrency regulatory efforts of the Biden administration and is expected to have a major impact across the industry.
On the 8th (local time), according to The Wall Street Journal (WSJ) and the U.S. Department of Justice, Vice Minister Todd Blanch announced in an internal memo that "platforms for cryptocurrency, such as exchanges, wallet providers, and mixing services, will not be prosecuted solely based on user actions." Previously, platforms could be criminally charged even if the operators had not directly committed illegal acts, simply because some users utilized the platform for purposes such as money laundering or evading sanctions.
The Department of Justice explained that this action accepts criticisms that excessive regulation occurred during the Biden administration regarding the cryptocurrency industry. The memo stated, "The previous administration's stance led to unfair levels of oversight for the industry," adding that the new policy aims to correct this.
The most notable case resulting from this decision is Roman Storm, co-founder of "Tornado Cash," who was indicted in 2023. Tornado Cash is a service that uses mixing technology to make it challenging to track cryptocurrency transaction paths. Prosecutors have argued that this service was used to launder more than $1 billion in illegal funds, including those related to North Korea's cyber organizations, which are under U.S. sanctions.
However, Storm's side has maintained that "it was merely third parties using the platform, and he, as the developer, is unrelated to any crime." His attorney, Brian Klein, noted, "This memo acknowledges that the indictment against Roman was unjust, and the lawsuit should never have been filed in the first place."
The Department of Justice still plans to pursue criminal penalties for fraud involving digital assets, misappropriation of investor assets, and money laundering by terrorists or criminal organizations. However, prosecutions based solely on the platform being "used" for illegal activities will essentially be halted.
The Department of Justice also plans to dismantle the "National Cryptocurrency Enforcement Team" established during the Biden administration. Additionally, a specialized organization dedicated to market integrity and major fraud will also withdraw from cryptocurrency investigations, citing "changes in priorities."
Earlier, President Trump signed an executive order establishing a national reserve related to Bitcoin and hosted the first "Crypto Summit" at the White House. He also showed a favorable approach to the cryptocurrency industry by pardoning the founders of BitMEX, who were indicted on illegal financing charges.
Vice Minister Blanch himself holds cryptocurrency assets. According to documents submitted during his Senate confirmation process, he possesses various digital assets, including Bitcoin, Ethereum, Solana, Cardano, and Polygon, with Bitcoin assets alone estimated to be valued between $100,000 and $250,000. He has pledged to dispose of all his holdings within 90 days of confirmation.
Meanwhile, the Securities and Exchange Commission (SEC) has recently shown a somewhat softened stance by dismissing some lawsuits against cryptocurrency exchanges. Consequently, regulatory attempts against Coinbase, Kraken, and others, based on the assertion that cryptocurrencies could be classified as securities during the Biden administration, are losing momentum.