- Senate Democrats criticized Deputy Attorney General Todd Blanche for disbanding the DOJ’s cryptocurrency enforcement team.
- Blanche directed DOJ staff to stop pursuing cases against crypto exchanges and mixers for their users’ actions, citing Trump’s executive order.
- The Senators argue this decision creates vulnerabilities that criminals and terrorists will exploit on a large scale.
Six Senate Democrats have strongly condemned U.S. Deputy Attorney General Todd Blanche for his recent decision to dismantle the Department of Justice’s crypto enforcement unit and shift the agency’s priorities away from cryptocurrency-related prosecutions. In a letter sent Thursday, the lawmakers claimed Blanche’s actions “give a free pass to cryptocurrency money launderers” and create dangerous regulatory gaps.
The letter—signed by Senators Mazie Hirono, Elizabeth Warren, Dick Durbin, Sheldon Whitehouse, Chris Coons, and Richard Blumenthal—criticized Blanche’s directive instructing DOJ staff to stop pursuing cases against crypto exchanges, mixers, or offline wallets “for the acts of their end users” or bringing criminal charges for regulatory violations in cryptocurrency cases.
Policy Shift Following Trump’s Executive Order
In his memo to DOJ staff on Monday evening, Blanche cited President Donald Trump‘s January executive order on crypto as the rationale behind his decision. “The Department of Justice is not a digital assets regulator,” Blanche wrote, adding that the agency will “no longer pursue litigation or enforcement actions that have the effect of superimposing regulatory frameworks on digital assets while President Trump’s actual regulators do this work outside the punitive criminal justice framework.”
Instead, Blanche instructed staff to focus on prosecuting criminals who “victimize digital asset investors” or use cryptocurrency to further other criminal schemes like organized crime, gang financing, and terrorism.
Democrats Push Back on Enforcement Pullback
The Senate Democrats called Blanche’s reasoning inadequate. “You claim in your memo that DOJ will continue to prosecute those who use cryptocurrencies to perpetrate crimes. But allowing the entities that enable these crimes — such as cryptocurrency kiosk operators — to operate outside the federal regulatory framework without fear of prosecution will only result in more Americans being exploited,” the lawmakers wrote.
They urged Blanche to reconsider his decision to disband the National Cryptocurrency Enforcement Team (NCET), calling it a “critical resource for state and local law enforcement” that often lack technical knowledge to investigate cryptocurrency-related crimes.
New York Attorney General Letitia James raised similar concerns in her own letter to Congress on Thursday. Though not directly mentioning Blanche’s memo, a press release from her office noted that her call for federal crypto regulations “comes after the [DOJ] announced the dismantling of federal criminal cryptocurrency fraud enforcement, making a robust regulatory framework all the more critical.”
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