Senators Seek Records Over DOJ Crypto Enforcement Shift

Six Democratic senators — Elizabeth Warren, Dick Durbin, Mazie Hirono, Sheldon Whitehouse, Christopher Coons, and Richard Blumenthal — sent a January 28 letter requesting ethics clearances, communications, and divestment records from Deputy Attorney General Todd Blanche by February 11, 2026, alleging a potential violation of 18 U.S.C. § 208(a) tied to Blanche's reported crypto holdings at the time of an April 2025 memo. Reporting indicated Blanche disclosed at least $159,000 in crypto-related assets when the memo was issued, with other estimates up to $470,000. The April 2025 memo disbanded the Department of Justice's National Cryptocurrency Enforcement Team (NCET), moved cryptocurrency work to general units, and directed prosecutors to avoid framing criminal matters as regulatory activity while pausing or halting broad crypto probes. The senators requested written determinations that the actions were lawful, any ethics clearances or waivers, records of internal discussions, and records of contacts between DOJ officials and industry or lobbyists preceding the memo. DOJ told lawmakers the changes were cleared in advance but has not identified who approved those clearances or released underlying ethics opinions. Public reporting and industry analyses cited TRM Labs data estimating illicit crypto flows at roughly $158 billion in 2025, a 162 percent increase from 2024. The Office of Inspector General has been notified and lists Blanche as a subject in a complaint. Potential near-term outcomes include DOJ producing the requested documents and ethics analyses and an OIG review that could lead to administrative actions, recusal orders, or a broader inquiry. Analysts and stakeholders identified key documents and signals to watch, including written ethics determinations, waiver letters, the full April 2025 memo, communications records between DOJ officials and industry actors, any updated guidance to U.S. attorneys on crypto matters, and any new coordinating office or lead for crypto investigations. The senators set a February 11 deadline for DOJ to produce the records, and DOJ's response together with any OIG findings will determine whether the department adjusts its enforcement posture, reinstates centralized resources, or implements internal discipline, with downstream implications for firms' screening, sanctions compliance, monitoring, and cooperation with investigators through 2026. 

Source: https://web3businessnews.com/policy/senators-probe-doj-crypto-conflict/

Hosted on Acast. See acast.com/privacy for more information.