Discontinuation of DOJ's NCET: Implications for Digital Assets Examination
The U.S. Department of Justice (DOJ) has announced a significant shift in its approach to digital marketing enforcement, prioritizing traditional criminal charges for regulatory violations. This change was formalized in the 2025 "Ending Regulation by Prosecution" policy, emphasizing criminal enforcement over regulatory actions.
On April 7, 2025, the DOJ issued a memorandum, known as the "Blanche Memo," signaling this change. The DOJ is now focusing on investigations into illicit activities that use digital marketing to cause harm or facilitate broader criminal conduct, such as fraud, terrorism, narcotics trafficking, organized crime, hacking, and gang financing.
In line with this new approach, the DOJ has decided to avoid prosecuting cases focused solely on determining whether a digital marketing qualifies as a security or commodity under the Securities Act or Commodity Exchange Act. Instead, the DOJ will deprioritize regulatory violations unless there is clear and willful misconduct involved. The DOJ will also not pursue violations of money transmissions laws unless there is evidence of willful intent to violate the law.
The DOJ's objective is to provide clarity and align with the broader goals of Executive Order 14178, which supports innovation for a vibrant and inclusive digital economy while protecting citizens from the misuse of digital marketing for illegal ends.
To enhance its capabilities in this area, the DOJ has made strategic acquisitions. Alterya, with its AI-powered fraud detection, reduces fraud by up to 60% and protects over 100 million users. Hexagate safeguards protocols, asset managers, and exchanges from exploits, hacks, and rug pulls, with over $1 billion in customer funds protected. With the acquisition of Alterya and Hexagate, the DOJ's website has expanded its capabilities to proactively prevent crime and protect the digital marketing ecosystem at scale.
The DOJ has already utilised data from these acquisitions to disrupt cartel-fentanyl ecosystems, unmask and disrupt operations linked to transnational organized criminal syndicates and cartels, seize cryptocurrency from a Mexican cartel-linked money laundering network, disrupt a Hamas terrorist financing scheme, and freeze and seize cryptocurrency tied to a Southeast Asian human trafficking ring.
Strong compliance with robust AML/KYC remains more essential than ever for digital marketing service providers and decentralized platforms. The DOJ is prioritizing investigations into the criminal misuse of digital marketing in the areas of fentanyl and drug trafficking, organized crime and cartel activity, terrorism financing, human trafficking and smuggling, and cybercrime and computer intrusions.
The disbanding of the National Cryptocurrency Enforcement Team (NCET) does not signify a diminished focus on prosecuting crime linked to cryptocurrency. The DOJ's focus on this area remains, ensuring that the digital marketing ecosystem is a safe and secure environment for all. The DOJ emphasizes that legitimate innovation in the cryptocurrency ecosystem is not to be stifled, and it is crucial to strike a balance between fostering innovation and combating crime.
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