Senate Democrats have criticized the Justice Department's decision to close its crypto unit, calling it a “loophole” for criminals.
Six lawmakers sent a letter to Deputy Attorney General Todd Blanche on Thursday asking him to reconsider a recent decision to dismantle the Justice Department's cryptocurrency enforcement unit.
Cheyenne Ligon | Edited by Nikhilesh De , Apr 11, 2025, 00:04
What you need to know:
- Deputy Attorney General Todd Blanche has come under fire from Democratic senators for disbanding the Justice Department's cryptocurrency enforcement team.
- Senators argue that Blanche's decision weakens anti-money laundering efforts and creates vulnerabilities in the digital asset space.
Deputy U.S. Attorney General Todd Blanche has faced criticism from Senate Democrats following his recent decision to change the Department of Justice's (DOJ) priorities for enforcing cryptocurrency laws and disband its unit responsible for it.
On Thursday, six Democratic senators — Mazie Hirono (Hawaii), Elizabeth Warren (Massachusetts), Dick Durbin (Illinois), Sheldon Whitehouse (Illinois), Chris Coons (Delaware), and Richard Blumenthal (Conn.) — expressed dissatisfaction with his decision to scale back the National Cryptocurrency Enforcement Team (NCET), calling it “a condonation of cryptocurrency money launderers.”
Senators called Blanche's directive, which says the Justice Department will no longer bring cases against cryptocurrency exchanges, mixers, or offline wallets “for the actions of their end users” and will not bring criminal charges for crypto-related regulatory violations, including violations of the Bank Secrecy Act (BSA), “meaningless.”
“By abdicating the Justice Department’s responsibility to enforce federal criminal law in cases involving digital assets, you imply that virtual currency exchanges, mixers, and other digital asset entities are not required to meet their [anti-money laundering/counter-terrorist financing] obligations, creating a systemic vulnerability in the digital asset space,” the lawmakers wrote. “Drug traffickers, terrorists, fraudsters, and adversaries will exploit this vulnerability on a massive scale.”
In a memo to Justice Department staff on Monday evening, Blanche cited U.S. President Donald Trump's executive order on cryptocurrencies, issued in January, as the reason for his decision, which promised to bring clarity to regulation of the crypto industry.
“The Justice Department is not a digital asset regulator,” Blanche said, adding that the agency “will no longer bring litigation or take enforcement actions that would impose regulatory frameworks on digital assets while President Trump’s de facto regulators do that work outside of punitive criminal jurisdiction.”
Instead, Blanche urged Justice Department officials to focus on pursuing criminals who exploit “digital asset investors as victims” or those who use cryptocurrency to support other criminal schemes, such as organized crime, financial
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