Reported by Bradley L. Henry, Kathleen H. Shannon Of Blank Rome LLP

(Summary version featured below)

In spring 2025, the Department of Justice (DOJ) launched a significant overhaul of its financial crime strategy, marked by two major announcements: Deputy Attorney General Todd Blanche’s April 7 Memorandum and Criminal Division Chief Matthew Galeotti’s May 12 speech at the SIFMA Financial Crimes Conference. These initiatives represent a clear shift in priorities, focusing enforcement on the most serious threats such as investor fraud, terrorism, narcotics trafficking, and sanctions evasion, while scaling back prosecutorial action against compliant actors in the digital asset space. The DOJ emphasized its role as an enforcer of criminal laws—not a regulator of emerging financial technologies—and aims to reduce reliance on prosecutions to shape market behavior.

The April 7 Memorandum officially ends the practice of “regulation by prosecution,” directing prosecutors to avoid criminal cases that functionally impose regulatory requirements on digital asset innovators. Instead, the DOJ will concentrate on traditional criminal conduct, like asset misappropriation, fraudulent schemes, and the use of cryptocurrencies in serious crimes. As part of this strategic realignment, the DOJ disbanded the National Cryptocurrency Enforcement Team and is reallocating resources to higher-priority matters involving cartels, terrorism, and sanctions violations. This measured approach reflects a more targeted use of enforcement powers without diminishing the DOJ’s ability to pursue bad actors exploiting digital assets.

Galeotti’s May 12 remarks further introduced changes to DOJ policy on corporate enforcement, offering substantial incentives for voluntary self-disclosure. Companies that self-report, cooperate, and remediate misconduct can now qualify for automatic declinations or significantly reduced penalties—even in cases with aggravating circumstances. Additional updates include streamlined corporate monitorships with greater oversight and cost controls, as well as enhanced whistleblower rewards tied to financial forfeitures in DOJ-priority cases. These reforms aim to shorten investigations and concentrate efforts on crimes with the highest impact on national security and market integrity.

Despite the DOJ’s more collaborative tone toward innovators, financial institutions and digital asset firms must remain vigilant. Core compliance obligations under the BSA, OFAC, and other regulations remain fully enforceable. With cartels increasingly using crypto for illicit finance, the DOJ’s new policies emphasize seizure of digital assets tied to transnational criminal organizations, while generally sparing intermediaries unless there is willful misconduct. Firms are urged to invest in KYC protocols, blockchain analytics, and thorough documentation to prepare for future enforcement shifts. Proactive self-disclosure, alignment of corporate culture with compliance, and global regulatory awareness will be essential to mitigating legal risk in this evolving landscape.

Read full report: https://natlawreview.com/article/new-enforcement-blueprint-how-department-justice-re-shaping-its-approach-digital?amp