DOJ Cryptocurrency Enforcement Memo: Shifting Priorities and Protecting “Retail Investors”

On April 7, 2025, the Department of Justice (DOJ) released a memo that highlights its priorities in cryptocurrency investigations and cases. Under the new guidance, DOJ will focus its resources on cases involving clear victimization of retail investors, such as investment frauds, hacks, rug pulls, and smart-contract exploitation. On the flip side, it will not devote resources to investigating cryptocurrency exchanges for criminal offenses that are regulatory in nature.

DOJ’s Goal: Protecting Retail Investors

One of the most significant takeaways from the 2025 DOJ cryptocurrency enforcement memo is the Department’s clear prioritization of cases involving retail investor harm. DOJ will focus on investigating and prosecuting:

• Hacks of cryptocurrency exchanges or wallets,

• Fraudulent investment schemes and rug pulls,

• Exploitation of vulnerabilities in smart contracts to steal digital assets, and

• Criminal conduct involving theft, fraud, or market manipulation directly harming individual investors.

This tact from DOJ mirrors recent moves at other agencies, including the SEC, to reorient enforcement away from regulatory technicalities and toward misconduct that results in financial losses for individuals.

Low Priority Investigations: “Regulatory” Offenses

DOJ also discouraged prosecutors from investigating and charging seemingly regulatory infractions in the crypto space, including:

• Investigations of exchanges, mixing services, and tumblers for violations of 18 U.S.C. § 1960 (unlicensed money transmitting) or Bank Secrecy Act (BSA) obligations, unless other criminal conduct is involved.

• Technical licensing failures or registration lapses, absent deliberate criminal intent and victimization.

DOJ's Neutrality on Whether Tokens Are Securities or Commodities

DOJ also instructed prosecutors to avoid inserting DOJ in the debate of whether whether a digital asset is a "security" or "commodity." Under the new memo:

• DOJ prosecutors should not bring charges that require litigation over a token’s classification under the Securities Act or Commodity Exchange Act.

• Title 15 offenses, including offenses for securities fraud, market manipulation or both, will generally not be pursued unless there is clear, provable fraud resulting in victim harm.

• Instead, DOJ will instead prioritize traditional white-collar offenses, including wire fraud, money laundering, and other offenses under Title 18 that do not require any proof that a token is a security or a commodity.

Will DOJ Follow Through on Cryptocurrency Enforcement Changes?

The practical impact of this guidance remains to be seen. DOJ claims it wants to pursue cases the victimize retail investors. As with any policy shift, the "proof will be in the pudding" as new cases are filed—or declined—in the coming months. Industry participants should monitor enforcement trends carefully to assess whether DOJ’s shift toward investor-focused prosecutions becomes a reality.

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Scott Armstrong, a former senior supervisor and Assistant Chief at DOJ’s Fraud Section in DC, represents clients facing government investigations and allegations of impropriety in the cryptocurrency market. At McGovern Weems, Scott draws on his trial experience in cryptocurrency cases to offer strategic defense to individuals in all corners of the cryptocurrency market. If you are involved in a government investigation relating to cryptocurrency fraud, reach out to Scott Armstrong.