In a significant policy reversal that’s sending ripples through the cryptocurrency industry, the Department of Justice has fundamentally changed its approach to prosecuting certain crypto-related crimes. The shift, articulated by Principal Deputy Assistant Attorney General Nicole M. Galeotti, reclassifies cryptocurrency transmissions in criminal cases, potentially broadening the scope of enforcement actions against digital asset businesses.
Speaking at the American Conference Institute’s 40th International Conference on the Foreign Corrupt Practices Act, Galeotti announced that the DOJ no longer views cryptocurrency transmission as a service but rather as the movement of assets themselves. This technical distinction carries profound legal implications that could reshape the regulatory landscape for exchanges, wallet providers, and other crypto businesses.
“We’re witnessing a paradigm shift in how federal prosecutors will approach cryptocurrency cases,” explains Marcus Henderson, blockchain compliance attorney at Digital Asset Defenders. “By focusing on the assets rather than the service of transmission, the DOJ creates a lower threshold for bringing charges in certain scenarios.”
The policy shift effectively overturns guidance issued in 2020, which had classified cryptocurrency transmission primarily as a service. Under the new interpretation, cryptocurrency movements could potentially trigger different statutes and regulations, including those designed for traditional financial assets.
Industry experts note that this realignment better reflects the technological reality of blockchain transactions. When cryptocurrencies move between wallets, no third-party “service” necessarily facilitates the transfer—unlike traditional banking where institutions mediate transactions. Instead, the assets themselves migrate across the distributed ledger through cryptographic verification.
For cryptocurrency businesses, particularly exchanges and custodial services, this reinterpretation necessitates a thorough review of compliance frameworks. The reclassification could potentially expand the applicability of money laundering statutes, the Bank Secrecy Act, and other financial regulations to crypto transactions that previously existed in regulatory gray areas.
“Companies operating in the cryptocurrency space should immediately consult with legal counsel to understand how this policy shift might affect their business models and compliance obligations,” advises Sarah Williamson, former federal prosecutor now specializing in financial technology regulation. “What might have been compliant under the service-based interpretation could now potentially attract scrutiny under an asset-based framework.”
The timing of this announcement coincides with broader governmental efforts to bring cryptocurrency firmly within the regulatory perimeter. The Securities and Exchange Commission has intensified enforcement actions against crypto firms, while the Treasury Department has expanded reporting requirements for digital asset transactions.
Market analysts suggest this policy recalibration reflects growing sophistication in how law enforcement understands blockchain technology. Early regulatory approaches often attempted to force cryptocurrencies into existing financial service frameworks, sometimes creating awkward legal constructs that didn’t align with the technical realities of distributed ledger systems.
“The DOJ is getting smarter about crypto,” notes blockchain researcher Michael Chen from the Digital Currency Initiative. “This shift shows they’re developing more nuanced understandings of how cryptocurrencies actually function, which could eventually lead to more effective and appropriate regulation.”
Critics of the policy change argue it represents another example of “regulation by enforcement” rather than clear rulemaking. Industry advocates have consistently called for comprehensive cryptocurrency legislation rather than piecemeal policy adjustments and enforcement actions.
“The industry needs clarity, not shifting interpretations,” argues Blockchain Association policy director Angela Morris. “When the rules of the game keep changing, it’s difficult for legitimate businesses to ensure compliance.”
For individual cryptocurrency users, the immediate impact may be limited, but the ripple effects could eventually reach retail investors if exchanges implement stricter compliance measures in response to the DOJ’s new stance.
The policy shift underscores the ongoing evolution of cryptocurrency regulation as authorities grapple with applying traditional legal frameworks to novel digital technologies. As blockchain adoption continues to grow, these interpretive adjustments will likely continue until comprehensive legislation specifically addressing cryptocurrencies is enacted.
As the dust settles on this announcement, one thing remains clear: the era of regulatory ambiguity in cryptocurrency is gradually giving way to more defined, if sometimes contested, legal frameworks. For businesses operating in this space, adaptive compliance strategies will prove essential in navigating this shifting landscape.
