Did Bitcoin's Safety Just Decrease? Trump Administration Shrinks Crypto Team and Cuts Back on Regulation

After today, Crypto will have less scrutiny over certain aspects of its operations, especially exchanges and offline, or cold, crypto wallets .

President Donald Trump’s administration disclosed on Monday evening in an official memorandum that it will be dissolving the National Cryptocurrency Enforcement Team, which was set up in 2022 to tackle cryptocurrency fraud. This decision comes in 2023. crypto scams the cost to victims exceeded $5.6 billion, as stated in the report. an FBI report .

Deputy Attorney General Todd Blanche stated that the previous administration employed the Justice Department in an imprudent regulatory approach through prosecutions, one that was misguided and inadequately carried out. the memo .

Trump previously stated that his aim is to transform the US into the " cryptocurrency hub of the globe It’s important to mention that Trump and his family could potentially earn significant profits from cryptocurrency. They introduced their TRUMP coin in January and have since been involved in this market. A 75% share in the cryptocurrency bank World Liberty Financial .

By eliminating the NCET, cryptocurrency -- a sector ripe with scams and rug pulls -- could become even riskier. Here's what you need to know.

What's changing with how regulators can target crypto fraud?

In the memo, Blanche ordered the Justice Department to stop targeting crypto exchanges, offline wallets, and mixing and tumbling services. Mixing and tumbling involves combining illicit digital currencies with legitimate currency to obscure their origin.

Instead, the Justice Department will focus on investigations and prosecutions of conduct that victimize investors, such as embezzlement on exchanges, digital asset investment scams, and fake digital asset development projects such as rug pulls.

The Justice Department will also examine cases involving drug cartels and organized crime that use cryptocurrency to further their activities, according to the memo.

How can you safeguard yourself against cryptocurrency scams?

While focusing on those digital crimes isn't objectively bad, it comes at the cost of the NCET and less scrutiny of crypto exchanges and offline wallets, which most smaller crypto investors use.

Eliminating the NCET , which investigated criminal use of digital assets, could potentially make investing in crypto -- an already risky investment type -- even riskier.

To keep your investments safe, verify the legitimacy of whichever projects you want to invest in. Doing your own research is a good way to detect whether a project is legitimate. If you're worried about scams, take a second to collect yourself. Slowing down in the heat of the moment can go a long way.

Consider if the communications seem out of place. They might appear overly promising, push for an immediate completion with little time for reflection, and offer minimal information regarding the venture. Stay clear of opportunities that promise fast wealth.

And of course, Be cautious with your recovery phrase. Make sure not to lose it and do not share it with anybody.

Initially released on April 8, 2025 at 11:07 a.m. Pacific Time.