A group of U.S. senators has called for an explanation from Deputy Attorney General Todd Blanche regarding his decision to disband a cryptocurrency enforcement team while holding significant digital assets. The move, detailed in a memo last April, has raised concerns about potential violations of federal conflict-of-interest laws. The Campaign Legal Center has also filed a complaint urging an internal DOJ investigation.
In a letter dated January 28, six Democratic senators, including Elizabeth Warren of Massachusetts, demanded answers from Todd Blanche, the U.S. Deputy Attorney General and a former criminal attorney for President Trump. The senators questioned Blanche's motivations for issuing a memo in April that disbanded the four-year-old National Cryptocurrency Enforcement Team, which had led investigations into crypto-enabled crimes and coordinated prosecutions.
The memo directed prosecutors not to pursue crypto exchanges, mixers, and offline wallets for the acts of their end users or unwitting regulatory violations. At the time, this was seen by some as an effort to influence New York prosecutors who had charged Roman Storm, the developer of a crypto mixer, a case that irked allies of Trump in the cryptocurrency industry. The senators suggested the decision might have benefited Trump's crypto ventures, but recent reporting has shifted scrutiny to Blanche's personal holdings.
According to ProPublica, Blanche held up to $480,000 in cryptocurrency when he issued the memo. Despite pledging to divest his holdings 'as soon as practicable,' he did not begin selling until late May. 'The fact that you held substantial amounts of cryptocurrency at the time you made this decision calls into question your own motivations,' the senators wrote in their letter.
Last week, the nonpartisan Campaign Legal Center filed a complaint with the DOJ's Office of the Inspector General, asking it to investigate whether the memo 'benefitted the digital asset industry' and, by extension, Blanche's investments. Such a conflict could violate federal laws, punishable by up to five years in prison.
A spokesperson for Blanche responded to ProPublica, stating he 'upholds the highest levels of transparency and ethical standards. As such, this was appropriately flagged, addressed, and cleared in advance.' The senators have now requested details on this statement, the conflict-of-interest procedures followed, and the delay in divesting his crypto assets.
This episode highlights ongoing tensions between the Trump administration and cryptocurrency regulation, amid broader concerns about conflicts of interest in federal enforcement.
