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This policy change aligns with Trump's executive order advocating for open access to blockchain networks and reflects his administration's broader support for easing regulations in the digital assets industry, in which he holds a personal stake.
Trump and his family have branched out into multiple crypto projects in the past year. One is a yet-to-be-launched, decentralized digital bank called World Liberty Financial, which has already sold $550 million in tokens. That venture sends 75% of profits to Trump-linked entities. The family also makes money from the Trump- and Melania-branded meme coins.
As part of the latest action, the Market Integrity and Major Frauds Unit will cease all cryptocurrency enforcement efforts.
The criminal division's Computer Crime and Intellectual Property Section will continue to play a supporting role by providing guidance and training to Justice Department personnel and acting as a liaison to the digital asset industry.
The memo criticized past efforts to use criminal enforcement as a de facto regulatory tool for the cryptocurrency industry under the Biden administration. The Justice Department will narrow its focus to prosecute individuals who use digital assets to commit or facilitate serious crimes.
The Justice Department emphasized it will continue to investigate and prosecute digital asset-related crimes when they involve investor fraud or are used to support terrorism, human trafficking, cartel operations and cybercrime.
"Litigation or enforcement actions that have the effect of superimposing regulatory frameworks on digital assets" will no longer be pursued, the memo states, deferring that responsibility to financial regulators operating outside the criminal justice system.
The Justice Department did not immediately respond to CNBC's request for comment.
Since taking office, the Trump administration has rapidly scaled back oversight, with the Securities and Exchange Commission pausing or abandoning several high-profile enforcement actions, and revoking a banking rule that blocked Wall Street banks from adopting crypto.
Despite the deregulatory shift, the digital asset market has plunged in the last month alongside equities. Bitcoin is trading at around $78,000, down from its all-time high near $110,000, and the wider crypto market has erased more than $1.2 trillion from its market cap since December.
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