CFTC Aligns Crypto Enforcement With DOJ—Low-Level Violations No Longer Chased

The CFTC has unleashed a major overhaul of crypto enforcement, slamming the brakes on punitive regulation and shifting power back to innovators.

The Commodity Futures Trading Commission (CFTC) is undergoing a major shift in its crypto enforcement priorities, aligning with the U.S. Department of Justice (DOJ) and aiming to return power to innovators.

Acting Chair Caroline D. Pham issued a sweeping directive on Monday in Washington D.C., reshaping the agency’s approach to digital assets.

Her announcement follows the DOJ’s move to cease the controversial practice of regulating cryptocurrency through prosecution rather than clear rulemaking. In response, Pham instructed CFTC staff to cease pursuing digital asset-related registration violations unless there is clear evidence of intentional wrongdoing.

This action signals an end to what Pham described as years of punitive overreach by the Commission, which she sharply criticized in her statement.

“For far too long, lawfare from multiple federal agencies against innovators in the digital asset space has created unfairness and uncertainty that has undermined trust in the regulatory process and impeded American competitiveness,” she said.

Acting Chair Pham’s statement and directive come in response to Executive Order 14219 and the DOJ’s updated charging guidelines, both of which reinforce a shift in focus away from using legal action as a proxy for policy clarity.

President Trump issued Executive Order 14219 in February, directing federal agencies to review and eliminate regulations that are unconstitutional, based on improper legislative delegation, or impose high costs without clear public benefit. That same month, the DOJ issued new policy directives, including a memo on charging, plea deals, and sentencing that instructed prosecutors to pursue the most serious and readily provable offenses. Additionally, the DOJ will no longer maintain a dedicated unit to focus on cryptocurrency-related offenses.

With the Commission currently unable to secure a majority vote to dismiss or settle ongoing litigation, Acting Chair Pham is using her executive authority to prioritize the agency’s limited resources.

Her directive signals a strategic redirection of enforcement efforts, reserving agency resources for combating fraud, manipulation, and clear-cut violations of law. By narrowing the focus of prosecutions, the CFTC aims to restore certainty to digital asset markets while avoiding unnecessary entanglement in cases lacking evidence of willful misconduct.