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04/14/2025

US Relaxes Anti-Money Laundering Rules for Crypto: Opportunity or Threat to the Global Financial System?

On April 14, 2025, an internal memo from the US Department of Justice (DOJ) unexpectedly sparked a wave of controversy across the finance and tech world. According to the document, crypto platforms such as exchanges or coin mixing services (mixers) would no longer be subject to prosecution if end users exploit their services for illegal activities. Crypto No Longer a Target? The memo, signed by Deputy Attorney General Todd Blanche, emphasized the importance of the crypto industry to national economic growth — directing the DOJ to stop prosecuting crypto platforms for the illegal conduct of their end use

US Relaxes Anti-Money Laundering Rules for Crypto: Opportunity or Threat to the Global Financial System?

On April 14, 2025, an internal memo from the US Department of Justice (DOJ) unexpectedly sparked a wave of controversy across the finance and tech world. According to the document, crypto platforms such as exchanges or coin mixing services (mixers) would no longer be subject to prosecution if end users exploit their services for illegal activities.

Crypto No Longer a Target?

The memo, signed by Deputy Attorney General Todd Blanche, emphasized the importance of the crypto industry to national economic growth. From this position, the DOJ directed that crypto platforms would no longer be prosecuted for the illegal actions of their end users.

This covers both centralized exchanges (CEXs) and mixers such as Tornado Cash and ChipMixer — tools that have been implicated in numerous money laundering operations, particularly in connection with fentanyl trafficking cases.

Blanche's argument: the DOJ would continue pursuing criminal organizations such as drug trafficking networks or terrorism financiers, but would "not target the platforms used by those organizations."

Breaking with Legal Precedent

This stance runs counter to a fundamental legal principle in the financial industry: intermediary institutions (such as banks and digital wallets) can be held liable if they allow their services to be used for money laundering or sanctions evasion.

In practice, in 2024, major banks like TD Bank faced lawsuits because their customers had ties to criminal organizations. Under the new memo, this standard appears to no longer apply to crypto institutions.

Opening the Door to Money Laundering?

Another point of concern is the DOJ's refusal to prosecute non-custodial wallets — where users hold their own assets without going through an intermediary. This effectively means that if someone uses USDT in a personal wallet to carry out illegal transactions, issuers like Tether or Circle would face no legal liability either.

Critics argue this creates a dangerous "legal loophole," making it easier for criminals to evade oversight and increasing the use of crypto for illicit purposes.

Who Stands to Benefit?

Observers suggest the memo may be politically motivated — aimed at appeasing pro-crypto groups that wielded significant influence over the 2024 election cycle, including Web3 startup founders in San Francisco and libertarian voters who backed former President Donald Trump.

Beyond that, traditional banks — historically wary of crypto-related risk — may now feel comfortable exploring direct integration with the blockchain ecosystem to capitalize on cost advantages and expand their operations.