DOJ Crypto Investigations End as Policy Shift Stuns Market

Key Points

• DOJ Crypto Investigations End as Policy Shift Stuns Market
• Ongoing investigations are dropped immediately
• Crypto community split over increased freedom vs. risk of scams
• Tornado Cash (TORN) jumps 10% after the announcement

The U.S. Department of Justice (DOJ) has just made one of the most surprising pivots in its crypto enforcement strategy to date. In a newly released directive, the DOJ announced it will no longer investigate or criminally charge cryptocurrency exchanges, mixers, or offline wallets based on the actions of their users.

This move ends the DOJ’s long-standing policy of targeting crypto platforms like Binance, KuCoin, and Tornado Cash, marking a major change in the U.S. government’s regulatory approach.

The DOJ stated:

“The Department will stop participating in regulation by prosecution… and will no longer target virtual currency exchanges, mixing and tumbling services, and offline wallets for the acts of their end users or unwitting violations.”

This announcement follows the official disbanding of the National Cryptocurrency Enforcement Team, the DOJ’s primary task force for investigating crypto crimes.

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

Most notably, the DOJ is dropping all ongoing investigations against crypto platforms. That includes high-profile cases, potentially giving a lifeline to firms previously under scrutiny. This decision also protects developers whose code might be misused, shielding them from criminal liability.

The market’s response was swift. Tornado Cash (TORN) surged nearly 10%, as investors took the move as a sign of friendlier crypto regulation ahead.

For those watching trends closely, this DOJ shift follows recent pro-crypto momentum seen across the board — from bullish indicators like the Q2 2025 altcoin outlook to increasing institutional interest in assets like tokenized gold.

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

Industry Divided Over Long-Term Impact

While some in the crypto space are praising the DOJ’s move as a sign of maturing regulation, others are raising red flags over its timing and implications.

Prominent blockchain sleuth ZachXBT recently warned of an “eye-opening” level of North Korean activity in DeFi. With the DOJ stepping back from crypto enforcement, there’s growing concern that malicious actors will operate more freely, especially through mixers and pseudonymous wallets.

On crypto Twitter, reactions have been fiery. Some cheered the end of “regulation by prosecution,” while others joked — or worried — that “crime is legal now.”

Researcher Molly White echoed a more skeptical tone:

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 BSA, but they wrote right here that they care about stopping crypto crime!”

— Molly White (@molly0xFFF) April 8, 2025

And it’s not just about legal theory. The real-world risk is high. With scams at all-time highs and crypto protocols being tested daily — like the recent Upcx hack that exposed serious security flaws — critics argue that reducing oversight could open the floodgates to more fraud.

This comes at a time when the broader macro environment is already influencing crypto volatility. With investors closely watching the Fed’s next move on interest rates, regulatory clarity is more important than ever.

The U.S. DOJ has axed its crypto squad, telling staff in a Monday evening memo that it will no longer be pursuing cases against crypto exchanges, mixers or offline wallets “for the acts of their end users.”

— unusual_whales (@unusual_whales) April 8, 2025

Could This Spark a New Bull Run — or a Wild West?

For crypto startups and developers, the DOJ’s policy change could be a green light for growth. With less fear of being held accountable for users’ actions, innovation may flourish — especially in areas like DeFi, privacy, and cross-border transactions.

Some analysts believe this move could coincide with a broader market rally. Recent trends show Bitcoin is decoupling from traditional markets, and altcoins are gaining strength. The Bittensor ecosystem is a prime example of how AI-driven blockchain projects are booming, even amid regulatory uncertainty.

However, others warn that the “Wild West” days may return. Without DOJ oversight, bad actors could exploit the system, using anonymity tools and offshore platforms to run unchecked schemes.

The DOJ did clarify that it retains the right to go after specific criminals in extreme cases. But critics argue that’s not enough — they believe systemic abuse is more likely to thrive without the ability to prosecute the platforms that enable it.

Still, some see this as a necessary evolution. The crypto space is maturing, and the focus may now shift from federal crackdowns to more transparent, innovation-friendly regulation. If balanced properly, this could help avoid another enforcement-heavy cycle that punishes both builders and users alike.

The DOJ’s sudden withdrawal marks a major moment in crypto history. Whether it leads to explosive growth or regulatory chaos will depend on how the market — and the industry — chooses to respond.