Senators Criticize DOJ’s Disbanding of Cryptocurrency Team, Fearing Increased Crime
A group of Democratic Senators, led by Elizabeth Warren, is criticizing the Department of Justice’s decision to dismantle its National Cryptocurrency Enforcement Team (NCET). The lawmakers argue that this move may lead to an increase in cryptocurrency-facilitated crimes such as money laundering and sanctions evasion. Elizabeth Warren and six other senators have written to Deputy Attorney General Todd Blanche, urging a review of this policy change. Blanche justified the closure, stating that the DOJ should focus on prosecuting individuals who directly harm crypto investors rather than acting as a digital assets regulator. NCET had previously played pivotal roles in major cases, including actions against Tornado Cash’s alleged money laundering. Additionally, concerns were raised about possible connections to former President Trump’s crypto-related activities and potential conflicts of interest. The senators have requested a comprehensive explanation of the DOJ’s decision and its impacts by May 1, fearing that the restructuring could weaken regulation enforcement in the crypto space.
Bearish
The DOJ’s decision to dismantle the National Cryptocurrency Enforcement Team is perceived as potentially increasing illicit activities like money laundering within the crypto space, thus weakening regulatory enforcement. This concern, particularly highlighted by Democratic lawmakers, suggests a negative sentiment towards regulatory capabilities, which could introduce uncertainty into the market. Such uncertainty may lead to lower investor confidence and potentially dampen the market’s growth in the short to medium term. Historically, regulatory changes perceived as lax or insufficient have led to apprehension among investors, which tends to have a bearish impact on the market.