Justice Department Narrows Digital-Asset Prosecutions in 'Ending Regulation by Prosecution' Memo
A Justice Department memorandum redirected federal digital-asset enforcement away from using criminal cases to construct regulatory policy while preserving prosecutions for fraud, theft, sanctions, terrorism, narcotics, and other crimes.
On April 7, 2025, Deputy Attorney General Todd Blanche issued a department-wide memorandum titled "Ending Regulation By Prosecution." The memo said the Justice Department was not a digital-asset regulator and directed prosecutors away from cases whose principal effect would be to impose a regulatory framework through criminal enforcement.
The policy change was particularly relevant to intermediaries and software around Bitcoin and other digital assets. The memorandum discussed exchanges, mixing and tumbling services, and offline wallets, and instructed prosecutors to focus on criminal actors rather than pursuing cases primarily because a service was used by others to commit wrongdoing.
The memo did not end digital-asset prosecutions. It expressly preserved enforcement against fraud, theft, hacking, terrorism financing, narcotics trafficking, organized crime, sanctions violations, and other criminal uses. Its significance lay in changing the Justice Department's stated theory of when criminal law should be used against digital-asset infrastructure and service providers.