US senators quiz deputy AG over DOJ crypto unit shutdown

Six US senators have challenged Deputy Attorney General Todd Blanche for shutting down the Department of Justice’s cryptocurrency enforcement team in April last year while holding substantial amounts of cryptocurrency at the time. 

Blanche disbanded the DOJ’s national cryptocurrency enforcement team in April 2025, just months after Donald Trump was inaugurated as US president following a pro-crypto campaign. 

The task force was created in 2022 under the Joe Biden administration and led major investigations, including the probe into Binance and its founder Changpeng “CZ” Zhao, who pleaded guilty in 2023 to violating US anti-money-laundering laws.

Blanche argued at the time that the DOJ is not a “digital assets regulator” and the Biden administration used the DOJ to “pursue a reckless strategy of regulation by prosecution.”

However, US senators Mazie K. Hirono, Elizabeth Warren, Richard Durbin, Sheldon Whitehouse, Christopher A. Coons and Richard Blumenthal allege that Blanche still held “substantial amounts” of cryptocurrency at the time of the decision, which raises a potential conflict of interest.

US senators question Blanche’s “motivations”

According to the senators, Blanche declared crypto holdings valued between $158,000 and $470,000 — mostly in Bitcoin (BTC) and Ethereum (ETH) — just days before Trump’s inauguration on Jan. 21.

By Feb. 10, he had agreed to divest the assets “as soon as practicable.” They highlighted the roughly two-month window between Blanche’s appointment on March 5 and his sale of crypto on May 31, just a month after issuing a memo on April 7 scaling back the enforcement task force.

“The fact that you held substantial amounts of cryptocurrency at the time you made this decision calls into question your own motivations,” said the US senators in a letter addressed to Blanche on Jan. 28.

Six senators jointly signed the letter sent to Todd Blanche. Source: Mazie K. Hirono

At the very least, you had a glaring conflict of interest and should have recused yourself,” they said, adding that his actions could constitute a violation of 18 U.S.C. § 208(a), which covers conduct impacting personal financial interests.

Senators previously said Blanche was making “grave mistakes”

Hirono, Warren, Durbin, Whitehouse, Coons and Blumenthal previously called the decision to shut down the enforcement unit a serious mistake in a letter to Blanche on April 10. 

“These are grave mistakes that will support sanctions evasion, drug trafficking, scams, and child sexual exploitation,” the senators said. “It makes no sense for the DOJ to announce a hands-off approach to tools that are being used to support such terrible crimes.”

Related: US senators to weigh CFTC, other amendments to crypto market structure bill

Crypto illicit activity surged in 2025, reaching a record high of $158 billion, an increase of nearly 145% from 2024, according to TRM Labs. 

During 2025, criminals stole $2.87 billion through almost 150 separate hacks.

“This increase was driven primarily by a dramatic rise in the receipt of cryptocurrency by sanctioned entities, but most categories of crypto crime saw increases, including human trafficking and other violent crime,” the senators argued.

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