The Justice Department’s move last year to shut down the crypto enforcement team came under fire after six US senators pressed the deputy attorney general for answers about his personal holdings of digital assets.
Advocates say the timing and handling of Deputy Attorney General Todd Blanche raise real questions about the conflicts that require clear records and a full explanation.
Senators Want Answers
Reports say that the letter, dated January 28, 2026, was sent by Senator Mazie Hirono and was joined by Senators Elizabeth Warren, Richard Durbin, Sheldon Whitehouse, Chris Coons, and Richard Blumenthal.
They asked Blanche to provide documents and explain why the National Cryptocurrency Enforcement Team (NCET) was disbanded in April 2025 and whether her funds played any role in that decision. Lawmakers pointed to conflict of laws laws and asked for a timeline and approvals behind the memo.
Six senators signed a joint letter addressed to Todd Blanche. Source: Mazie K. Hirono
The memo in the middle of the row told prosecutors to stop using law enforcement actions as a form of law enforcement. It said the department is “not a regulator of digital assets” and ordered NCET to be shut down, shifting its focus to crimes such as human trafficking, terrorism, and fraud that use crypto as a tool. That memo came from Blanche in April 2025 and marked a sharp change in the way US prosecutors would handle most crypto cases.
Who Owned What and When
Reports note that Blanche had significant crypto holdings when the policy was issued. Public ethics filings and reporting put his assets in a wide range — between $158,000 and $470,000 — mostly in major coins like Bitcoin and Ethereum, and other crypto-related investments.
The memo signed by Deputy Attorney General Todd Blanche. Source: DOJ
He agreed to the collapse, and other sales or transfers took place weeks to months after the memo. Critics say the sequence looks bad and may run afoul of conflict laws; fans say the stories were deleted by ethics officials.
People are talking on both sides
Supporters of the policy change say it would avoid “regulation by prosecution” and allow regulators to handle oversight instead of criminal prosecutions.
Industry groups welcomed the move as a way to reduce legal uncertainty in dealing with developers.
Opponents, including senators, say reducing the risk of a centralized enforcement unit leaves loopholes that bad actors can exploit, especially since illegal activity in crypto has shown significant volatility in recent years.
Next
Lawmakers are now pushing for documents and affidavits. They want to see when Blanche learned about the holding, how the rapid decline occurred, and who within the DOJ reviewed and approved the memo.
Members of parliament pointed to a federal law that prohibits an official from participating in a matter where he has a financial interest, and asked for a timeline and supporting records to judge whether that law is being respected.
Featured image from Getty Images, chart from TradingView
Planning process because bitcoinist focuses on delivering well-researched, accurate, and unbiased content. We maintain strict sourcing standards, and each page is diligently reviewed by our team of senior technical experts and experienced editors. This process ensures the integrity, relevance, and value of our content to our readers.
