DOJ Crypto Unit Closure Sparks Scrutiny Of Deputy AG’s Personal Crypto Stakes
The Justice Department’s transfer final yr to close a specialised crypto enforcement workforce is drawing recent hearth after six US senators pressed the deputy lawyer normal for solutions about his private stakes in digital belongings.
The lawmakers say the timing and Deputy Attorney General Todd Blanche’s holdings increase actual questions on conflicts that want clear data and a full rationalization.
Senators Demand Answers
Reports say the letter, dated January 28, 2026, was despatched by Senator Mazie Hirono and joined by Senators Elizabeth Warren, Richard Durbin, Sheldon Whitehouse, Chris Coons, and Richard Blumenthal.
They requested Blanche to supply paperwork and clarify why the National Cryptocurrency Enforcement Team (NCET) was disbanded in April 2025 and whether or not his personal funds performed any position in that call. The lawmakers pointed to federal battle guidelines and requested for the timeline and approvals behind the memo.
The memo on the middle of the row informed prosecutors to cease utilizing enforcement actions as a sort of regulation. It mentioned the division is “not a digital belongings regulator” and ordered the NCET closed, shifting focus to crimes like trafficking, terrorism, and fraud that use crypto as a device. That memo got here from Blanche in April 2025 and marked a pointy change in how US prosecutors would deal with many crypto instances.
Who Owned What And When
Reports word Blanche had sizable crypto holdings when the coverage was issued. Public ethics filings and reporting put his belongings in a variety — between $158,000 and $470,000 — principally in main cash resembling Bitcoin and Ethereum, with another crypto-related investments as effectively.
He agreed to divest, and a few gross sales or transfers occurred weeks to months after the memo. Critics say that sequence appears unhealthy and will run afoul of battle guidelines; supporters say the issues have been cleared by ethics officers.
People On Both Sides Are Talking
Proponents of the coverage change argued it will keep away from “regulation by prosecution” and let regulators deal with oversight as a substitute of prison instances.
Industry teams welcomed the transfer as a approach to cut back authorized uncertainty for exchanges and builders.
Opponents, together with the senators, say scaling again a targeted enforcement unit dangers leaving gaps that unhealthy actors can exploit, particularly as illicit exercise in crypto has proven sharp swings in recent times.
What Comes Next
Lawmakers at the moment are pushing for paperwork and sworn solutions. They wish to see when Blanche discovered of the holdings, how briskly divestment occurred, and who inside DOJ reviewed and accepted the memo.
The senators pointed to federal regulation that bars an official from collaborating in a matter once they have a monetary curiosity, and so they requested a timeline and supporting data to evaluate whether or not that regulation was revered.
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