IRS Crypto Enforcement Weakens as Industry Booms

Number of federal investigators focused on policing illicit crypto activity plummets to lowest level since 2017.

Published on Feb. 20, 2026

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As cryptocurrency use surges across the United States, the number of federal investigators focused on policing illicit financial activity within the sector has plummeted to its lowest level since at least 2017. The decline raises concerns about the government's ability to combat money laundering and other financial crimes in the rapidly expanding digital asset space.

Why it matters

The staffing cuts at the IRS come even as experts warn the agency has historically struggled to keep pace with the complexities of the crypto industry. The reduction in supervisory staff mirrors a broader trend across anti-money laundering enforcement agencies, signaling that the U.S. may be open to dirty money and undermining national security and market integrity.

The details

Federal data shows the number of IRS investigators assigned to oversee anti-money laundering defenses at crypto firms and other money transmitters fell by 33% to 139 agents in 2025, down from 208 in 2024. This represents the lowest number of investigators since 2017. The cuts follow a period of increased scrutiny and a rollback of oversight under the Trump administration, which oversaw an easing of regulations on crypto exchanges.

  • In 2025, the number of IRS investigators focused on crypto anti-money laundering fell by 33% to 139 agents.
  • In 2024, there were 208 IRS investigators focused on crypto anti-money laundering.

The players

Erica Hanichak

Deputy director at the FACT Coalition, a Washington-based nonprofit advocating for stronger safeguards against illicit financial flows.

Charles Rettig

Former IRS Commissioner who told Congress in 2021 that the agency needed more staff to address the 'rapidly evolving and expanding' cryptocurrency industry.

Christina Rea

A compliance specialist advising crypto firms on IRS anti-money laundering examinations.

Alison Jimenez

An anti-money laundering expert who highlighted the disparity in oversight between cryptocurrency exchanges and traditional banks.

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What they’re saying

“This sends the signal that the US is open to dirty money. It undermines our national security and market integrity.”

— Erica Hanichak, Deputy director, FACT Coalition (newsdirectory3.com)

“What's notable is that this contraction appears to be happening while the regulated crypto and fintech ecosystem has grown dramatically in scale, transaction volume, product complexity and risk exposure.”

— Christina Rea, Compliance specialist (newsdirectory3.com)

“Cryptocurrency oversight is a very loosely knitted-together safety net. Now it's just getting pulled farther apart.”

— Alison Jimenez, Anti-money laundering expert (newsdirectory3.com)

The takeaway

The decline in IRS crypto investigators raises serious concerns about the government's ability to combat money laundering and other financial crimes in the rapidly expanding digital asset space, potentially leading to larger scandals that harm consumers and damage the industry's integrity.