US Justice Department (DOJ) Will Stop Investigating Crypto Exchanges and Wallets

The US DOJ just published a new directive claiming it will stop investigating and criminally charging crypto exchanges, mixers, and offline wallets.

This has produced a mixed response from the crypto community. Some sectors are jubilant about the potential freedom for business, while others fear the growing problem of fraud and criminal money laundering.

DOJ is Moving On From Crypto

The US financial regulatory apparatus has been much more friendly to crypto since President Trump took office. The SEC is reviewing its guidelines, the FDIC is working to prevent future debanking, and the entire political climate is changing.

Today, the Department of Justice (DOJ) released a statement claiming it will no longer investigate crypto entities.

“The Justice Department will stop participating in regulation by prosecution in this space. Specifically, the Department 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,” the DOJ’s statement claimed.

The DOJ’s statement applies to cryptocurrency exchanges, wallets, and crypto mixers like Tornado Cash. It builds on the Department’s previous announcement today, claiming that it disbanded the National Cryptocurrency Enforcement Team.

The department gives itself room to prosecute individual bad actors, but only in specific circumstances.

The US DOJ has been notorious for leading some of the biggest criminal investigations against crypto exchanges, such as Binance and KuCoin. Its critical investigation and charges against Binance led to the record $4.3 billion settlement in 2023.

However, the department is now moving on from crypto. According to today’s announcement, it will even drop any ongoing investigations against such entities immediately.

We will wait to see what happens with the Tornado Cash and Samourai Wallet prosecutions. But the memo from the Deputy Attorney General yesterday is right on target: we should be going after bad guys. Not the developers of good tools that bad guys happen to use. pic.twitter.com/h8taM5BvGm

— Peter Van Valkenburgh (@valkenburgh) April 8, 2025

Also, it will not pursue legal liability for developers whose code is used by others to commit crimes, and it has closed all active investigations.

While it was expected that the department would lower its crypto enforcement under Trump, the complete laissez-faire decision has caught the crypto by surprise. Following the news, Tornado Cash (TORN) surged nearly 10% today.

Tornado Cash (TORN) Daily Price Chart. Source: TradingView

The Department also asked regulators to review victim compensation laws. Although this is arguably a victory for crypto, it may also enable future finance crimes.

Will Crypto Crime Run Riot?

Crypto sleuth ZachXBT recently claimed that there is an “eye-opening” level of North Korean activity in DeFi. If the department turns a blind eye to major criminal operations on these exchanges and mixers, it may enable serious violations.

After the announcement first broke, crypto Twitter was filled with users declaring that “crime is legal now.”

Additionally, the industry may be pushing its luck with a dramatic move like this. Crypto scams are at an epidemic level right now, and the market is very uncertain.

The DOJ is disabling its ability to target criminals on exchanges and mixers, with little guarantee that it can enforce the law. In other words, it may be removing critical guardrails to prevent future disasters.

“Crypto lobby: ‘Sure, Trump nixed the Crypto Enforcement Team, directed Major Fraud prosecutors to stop prosecuting crypto cases, and is trying to exempt crypto platforms from the Bank Secrecy Act, but they wrote right here that they care about stopping crypto crime! Reject the evidence of your eyes and ears!'” claimed crypto researcher Molly White.

Overall, it’ll be difficult to fully predict the implications of the department’s new policy on exchanges. For now, this directive will give many crypto-related businesses the freedom to conduct operations as they see fit.

Hopefully, business will proceed as usual without any serious controversies.