DOJ will no longer prosecute cryptocurrency fraud
30 comments
·April 9, 2025dang
We've moved the comments to https://news.ycombinator.com/item?id=43630208, which has the article this one points to, as well as a title that isn't misleading and linkbait. (But I haven't merged the comments that only make sense in the current context.)
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(In this case the title was misleading, as numerous commenters have pointed out, so it should not have been used.)
whimsicalism
What a blatantly misleading headline, this has to do with the whole Tornado cash prosecution if anyone has been paying attention.
croes
they basically made money laundering legal
whimsicalism
It is still illegal to launder money, but it is legal to develop contracts that facilitate laundering money. Sorta like section 230 but for crypto. But that is not the same as saying you will no longer prosecute fraud.
croes
Making money laundering of fraud money easy finding the fraudsters becomes nearly impossible.
It’s still prosecuted just without result.
__MatrixMan__
Laundering is when you fake a legitimate source for the funds. Obfuscating the source is a different thing.
Maybe it's still worth preventing: I'd prefer to know what kind of activity I've enabled when I accept somebody's money. Just if so, it's under a different label.
greenavocado
For a second I thought this was about Cashnado https://www.youtube.com/shorts/Hx6hLBM-TMs
whimsicalism
very happy to be in a very different cultural sphere than whatever this is
greenavocado
You mean your soul is untainted by the crushing grind of gambling addiction where the jackpot is just around the corner? https://www.youtube.com/watch?v=ahlmVEShsek
mellosouls
The title is a stretch, it even quotes the opposite:
"Instead of policing crypto platforms and exchanges, Trump’s DOJ will “focus on prosecuting individuals who victimize digital asset investors..."
Clearly there has been a shift in policy but the headline seems misleading at the very least.
cryptonector
u/dang or the new moderator (sorry, I'm not remembering the username right now) should consider changing the article this post refers to. If TFA really is editorializing and twisting the announcement in the title, then it's worth flagging, because all that does is inflame commentary here.
croes
> no longer target virtual currency exchanges, mixing and tumbling services, and offline wallets for the acts of their end users or unwittingly violations of regulations
Good luck finding those individuals.
simple10
This article feels a bit clickbaity. The sub-headline from the Washington Post article linked from The Verge article reads...
"The department [DOJ] won't pursue cases it feels are better left to financial regulators, focusing instead on crimes committed with cryptocurrency."
Correct me if I'm wrong, but this doesn't feel all that out of the ordinary. The SEC normally prosecutes exchanges. The previous US administration (Biden) created a special team in the DOJ to target cryptocurrency exchanges in the wake of FTX. The new administration (Trump) disbanded the team to refocus DOJ on other priorities, primarily terrorism, including crimes committed with cryptocurrency. SEC and other agencies will still police exchanges. It feels a bit of a leap to say fraud is now legal. Probably not a leap to say Trump is pro crypto since he seems obsessed with overall market stats.
The SEC needs to clarify it's rules around crypto. AFAIK, it's been a mess for years with a lot of uncertainty around how to operate.
Here's a random article from CNBC that explains it in more detail: https://www.cnbc.com/2025/04/08/doj-ends-crypto-enforcement-...
I suppose I can expect this comment to get downvoted. But if we keep overreacting to everything Trump does, we'll likely miss the bigger abuses of power. It would be nice to be able to discuss biz policies once again without the flame wars. The recent policy shift from being hostile to crypto to being more collaborative seems a good thing. And yes, we need to keep a close eye on where this goes because people will try to exploit it with fraud.
Group_B
Fraud is legal! Yaaaaaayy
dang
Maybe so, but please don't post unsubstantive comments to Hacker News.
We've had to ask you this before.
null
sunshinerag
[flagged]
daedrdev
?????????????????
9283409232
What does this even mean?
miltonlost
Austrian economics and libertarians think fractional reserve banking is inherently fraudulent. Just more right-wing lunacy to easily ignore.
rvz
don't forget insider trading in congress.
msgilligan
The article is paywalled, but the headline word "fraud" doesn't match the first few paragraphs of the article.
"Regulation by enforcement" has been a real thing and a bad thing. You can't expect people to obey the law if you won't tell them what it is.
I would like to see the government prosecute actual fraud, so if the article goes on to say they will not prosecute that, then maybe the headline is accurate.
miltonlost
What is actual fraud? Is it what SBF did? Is it what what coinbase did? Both of those were actual fraud to me, and Coinbase was let go, and would be under this policy.
> You can't expect people to obey the law if you won't tell them what it is.
Good thing this wasn't happening with crypto fraud. Wire fraud is pretty much the same even with blockchain.
Animats
> You can't expect people to obey the law if you won't tell them what it is.
That's an excuse the crypto community dreamed up. The SEC's position, pre-Trump, was quite clear: crypto assets are securities. File an S-1, as you would for an IPO, with all the usual disclosures, under penalty of perjury. A very few crypto issues did that.
This new statement is mostly about crypto "exchanges". Pure exchanges aren't so bad. At no point in a trade does the NYSE own the asset. It's that crypto exchanges are usually not just exchanges, but brokers, dealers, custodians, and lenders. All of which can lose assets.
Actual memo: [1] It doesn't really change much. Frauds against investors can still be prosecuted.
ggreer
The Washington Post has the text of the memo.[1] Here are the parts that tell the DOJ to stop prosecuting certain crimes:
> Prosecutors should not charge regulatory violations in cases involving digital assets— including but not limited to unlicensed money transmitting under 18 U.S.C. § 1960(b)(1)(A) and (B), violations of the Bank Secrecy Act, unregistered securities offering violations, unregistered broker-dealer violations, and other violations of registration requirements under the Commodity Exchange Act-unless there is evidence that the defendant knew of the licensing or registration requirement at issue and violated such a requirement willfully. This priority is not required by law, but is being imposed as a matter of discretion, in recognition of the Justice Department’s priorities and the fact that the Biden Administration created a particularly uncertain regulatory environment around digital assets.
> Prosecutors should not charge violations of the Securities Act of 1933, the Securities Exchange Act of 1934, the Commodity Exchange Act, or the regulations promulgated pursuant to these Acts, in cases where (a) the charge would require the Justice Department to litigate whether a digital asset is a “security” or “commodity,” and (b) there is an adequate alternative criminal charge available, such as mail or wire fraud.
The memo redirects priorities to, "...embezzlement and misappropriation of customers’ funds on exchanges, digital asset investment scams, fake digital asset development projects such as rug pulls, hacking of exchanges and decentralized autonomous organizations resulting in the theft of funds, and exploiting vulnerabilities in smart contracts." It also prioritizes prosecution of people and organizations who use cryptocurrency to further terrorism, human trafficking, narcotics, organized crime, and hacking. Lastly, it disbands the National Cryptocurrency Enforcement Team and folds them back into Computer Crime and Intellectual Property, which is how the DOJ was organized in 2021.
The only prosecution I can think of that wouldn't happen under these new rules is that of Roman Storm, who is facing up to 45 years in prison for developing Tornado Cash, an open source decentralized cryptocurrency tumbler. The DOJ is not claiming that Storm engaged in money laundering or that he ran a service that allowed people to do so. He is being prosecuted because other people used the software to commit crimes. This is an obvious free speech issue, which is why the EFF filed an amicus brief in support of Storm.[2]
2. https://www.yahoo.com/news/digital-rights-group-eff-calls-05...
The title is, basically, a lie. “no longer target virtual currency exchanges, mixing and tumbling services, and offline wallets for the acts of their end users or unwittingly violations of regulations.” is by far not the same as not prosecuting fraud.
Not targeting exchanges for actions of their users in particular is an unambiguously good thing. I thought people here were pro not targeting media platforms for user comments, or file exchange protocols for what users are sharing?