Todd Blanche is now interim Attorney General. If you work in digital assets, that matters. Blanche authored the February 2025 memo that fundamentally reshaped DOJ's approach to crypto enforcement—disbanding the National Cryptocurrency Enforcement Team and deprioritizing cases that amounted to regulation-by-prosecution. Now he's running the department.
What the February Memo Actually Said
The memo did three concrete things. First, it eliminated NCET entirely. Second, it directed prosecutors to stop pursuing cases where the only alleged wrongdoing was operating without a license or failing to register—conduct that Blanche argued should be handled by regulators, not criminal prosecutors. Third, it narrowed DOJ's crypto focus to actual fraud: schemes that victimize investors, not technical compliance failures.
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This was a significant shift. Under the previous administration, DOJ had been willing to bring criminal charges for conduct that arguably fell into regulatory gray areas. The Blanche memo drew a brighter line.
Why His Elevation Matters
Personnel is policy. The question after any major policy memo is always: will it stick? Memos can be rescinded. Priorities can shift with new leadership. But when the author of the memo becomes the leader of the department, that question largely answers itself.
Blanche's appointment as interim AG signals continuity. The enforcement philosophy he articulated in February—focus on fraud, leave technical compliance to regulators—is now backed by the full authority of his office. Digital asset firms can reasonably expect this framework to remain in place for the duration of his tenure.
What This Means Operationally
For compliance officers at digital asset firms, this provides a degree of clarity that has been in short supply. A few practical takeaways:
- DOJ criminal risk is lower for technical violations. Operating in a regulatory gray area is still risky from a civil enforcement standpoint, but the threat of criminal prosecution for licensing failures has meaningfully decreased.
- Fraud remains the red line. Customer harm, misappropriation, Ponzi structures, market manipulation—these are still firmly in DOJ's crosshairs. The memo didn't soften enforcement against actual bad actors.
- SEC and CFTC civil enforcement continues. The DOJ stepping back does not mean digital asset firms have a free pass. Civil regulators have their own agendas, and the SEC in particular has continued to bring cases.
Don't Get Comfortable
I've seen firms treat favorable policy shifts as license to relax. That's a mistake. The regulatory environment for digital assets remains volatile. Blanche's tenure is interim. The next AG—or the next administration—could reverse course entirely.
The smart play is to use this window to strengthen your compliance infrastructure, not to coast. Document your AML/KYC procedures. Ensure your custody arrangements are bulletproof. Build the kind of program that holds up regardless of who's running DOJ.
Favorable enforcement posture is not the same as no enforcement posture. Plan accordingly.
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Key Takeaways
Does this mean DOJ won't prosecute crypto companies at all?
No. The Blanche memo deprioritized cases involving technical compliance failures like licensing issues. DOJ is still actively pursuing fraud, market manipulation, and schemes that harm investors. If you're running a legitimate operation, your criminal risk is lower. If you're defrauding customers, nothing has changed.
How does this affect SEC and CFTC enforcement?
It doesn't. The DOJ memo addressed criminal prosecution only. Civil enforcement by the SEC and CFTC continues independently. Firms still face significant regulatory risk from both agencies, and the SEC has shown no signs of scaling back its digital asset cases.
Should we update our risk assessments based on this development?
Yes, but carefully. Your criminal exposure for technical violations has decreased, which is worth documenting in your enterprise risk framework. But civil exposure remains, and the political environment could shift. I'd reflect the current DOJ posture while noting its interim nature.
The content in this blog is for informational purposes only and does not constitute legal advice, regulatory guidance, or an offer to sell or solicit securities. GiGCXOs is not a law firm. Compliance program requirements vary based on business model, customer base, and regulatory classification.