Six Democratic senators have accused Deputy Attorney General Todd Blanche of a glaring conflict of interest in shutting down cryptocurrency enforcement efforts. A ProPublica investigation revealed that Blanche held at least $159,000 in crypto-related assets when he issued the order. The senators demand details on how his actions were cleared ethically.
On January 31, 2026, Democratic Senators Elizabeth Warren, Dick Durbin, Mazie Hirono, Sheldon Whitehouse, Christopher Coons, and Richard Blumenthal sent a letter to Deputy Attorney General Todd Blanche, criticizing his decision to halt investigations into cryptocurrency companies, dealers, and exchanges. The senators, several of whom serve on the Senate Judiciary Committee, cited a ProPublica report showing that Blanche owned substantial crypto assets at the time of the order.
Blanche, the Justice Department's second-highest official, had signed an ethics agreement in February promising to divest his cryptocurrency holdings within 90 days of confirmation and to avoid matters affecting his financial interests in virtual currencies. However, on April 7, before completing the divestment, he issued a memo titled "Ending Regulation by Prosecution." This document ended probes launched under President Joe Biden, condemned the prior approach as reckless, and disbanded the National Cryptocurrency Enforcement Team, which had secured notable convictions.
The memo shifted focus to targeting only terrorists and drug traffickers using crypto, sparing the platforms involved. The senators had previously urged Blanche to reconsider, warning that the change could aid sanctions evasion, drug trafficking, scams, and child exploitation. Their latest letter notes a 2025 surge in illicit crypto activities, including money laundering and human trafficking.
"At the very least, you had a glaring conflict of interest and should have recused yourself," the senators wrote. They also referenced President Donald Trump's financial interests in cryptocurrency and his pardons of related convicts, questioning Blanche's motivations.
A Justice Department spokesperson stated that Blanche's actions were "appropriately flagged, addressed and cleared in advance," without further details. The senators have demanded by February 11 any written determinations on legality, communications with ethics officials, and contacts with the crypto industry.
Separately, the Campaign Legal Center requested an investigation by the Justice Department's inspector general, alleging violations of conflict-of-interest laws. The group noted Blanche's bitcoin value rose 34% to $105,881.53 post-memo, alongside holdings in Solana, Ethereum, and Coinbase stock. Penalties for willful violations include up to five years in prison.
Blanche previously served as a federal prosecutor and led Donald Trump's defense in his Manhattan hush-money trial, as well as cases on election subversion and classified documents, which were dropped after Trump's reelection.
