DOJ Crypto Unit Closure Sparks Scrutiny Of Deputy AG’s Personal Crypto Stakes

bitcoinistPublicado a 2026-01-29Actualizado a 2026-01-29

Resumen

The Justice Department's decision to disband its National Cryptocurrency Enforcement Team (NCET) in April 2025 is under scrutiny from six US senators. They are questioning Deputy Attorney General Todd Blanche about potential conflicts of interest due to his personal cryptocurrency holdings. The senators, including Mazie Hirono and Elizabeth Warren, demand documents and a full explanation for the unit's closure and whether Blanche's finances influenced the decision. Critics argue the timing of his divestment raises ethical concerns, while supporters claim it was approved by ethics officials. The lawmakers are seeking a detailed timeline and records to ensure federal conflict-of-interest laws were followed.

The Justice Department’s move last year to shut a specialized crypto enforcement team is drawing fresh fire after six US senators pressed the deputy attorney general for answers about his personal stakes in digital assets.

The lawmakers say the timing and Deputy Attorney General Todd Blanche’s holdings raise real questions about conflicts that need clear records and a full explanation.

Senators Demand Answers

Reports say the letter, dated January 28, 2026, was sent by Senator Mazie Hirono and 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 his own finances played any role in that decision. The lawmakers pointed to federal conflict rules and asked for the timeline and approvals behind the memo.

The memo signed by Deputy Attorney General Todd Blanche. Source: DOJ

He agreed to divest, and some sales or transfers happened weeks to months after the memo. Critics say that sequence looks bad and could run afoul of conflict rules; supporters say the matters were cleared by ethics officials.

People On Both Sides Are Talking

Proponents of the policy change argued it would avoid “regulation by prosecution” and let regulators handle oversight instead of criminal cases.

Industry groups welcomed the move as a way to reduce legal uncertainty for exchanges and developers.

Opponents, including the senators, say scaling back a focused enforcement unit risks leaving gaps that bad actors can exploit, especially as illicit activity in crypto has shown sharp swings in recent years.

BTCUSD now trading at $87,783. Chart: TradingView

What Comes Next

Lawmakers are now pushing for documents and sworn answers. They want to see when Blanche learned of the holdings, how fast divestment happened, and who inside DOJ reviewed and approved the memo.

The senators pointed to federal law that bars an official from participating in a matter when they have a financial interest, and they requested a timeline and supporting records to judge whether that law was respected.

Featured image from Getty Images, chart from TradingView

Preguntas relacionadas

QWhat action by the US senators has brought renewed scrutiny to the closure of the DOJ's crypto enforcement team?

ASix US senators, led by Senator Mazie Hirono, sent a letter to Deputy Attorney General Todd Blanche pressing him for answers about his personal cryptocurrency holdings and the decision to disband the National Cryptocurrency Enforcement Team (NCET).

QWhat specific concerns did the senators raise regarding Deputy AG Todd Blanche?

AThe senators raised concerns about a potential conflict of interest, questioning whether Blanche's personal financial stakes in digital assets played a role in the decision to shut down the NCET and if the timing of his divestment complied with federal conflict-of-interest rules.

QWhat was the main argument from proponents who supported the policy change of closing the NCET?

AProponents argued that closing the specialized crypto enforcement team would avoid 'regulation by prosecution' and allow regulators, rather than criminal prosecutors, to handle oversight of the cryptocurrency industry.

QAccording to the article, what is the primary concern of the senators and other opponents of closing the NCET?

AOpponents are concerned that scaling back the focused enforcement unit creates gaps that bad actors can exploit, especially given the volatile nature of illicit activity in the cryptocurrency space in recent years.

QWhat specific information are the lawmakers demanding from Deputy AG Blanche and the DOJ?

AThe lawmakers are demanding documents and sworn answers detailing when Blanche learned of his crypto holdings, the timeline of his divestment, and which DOJ officials reviewed and approved the memo to disband the NCET, to ensure compliance with federal conflict-of-interest laws.

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