Six senators this week accused Deputy Attorney General Todd Blanche of a conflict of interest when he halted investigations into crypto companies, dealers and exchanges and removed enforcement teams dedicated to investigating crypto-related fraud and money laundering schemes.
The letter, written by Democratic Sens. Elizabeth Warren, Dick Durbin, and Maisie Hirono, and signed by Sens. Sheldon Whitehouse, Christopher Coons, and Richard Blumenthal, cites a ProPublica investigation that found Blanche owned at least $159,000 worth of crypto-related assets at the time he ordered the work to end.
Messrs. Durbin, Hirono, Whitehouse, Coons and Blumenthal serve on the Senate Judiciary Committee, which oversees the Justice Department.
The same senators had previously written to Blanche expressing concern that his actions would aid President Donald Trump’s economic interests in cryptocurrencies. In a letter sent Wednesday, they said Blanche’s actions appear to violate federal conflict of interest laws.
“Last year, we asked you about the rationale behind the Department of Justice (DOJ)’s puzzling decision to scale back its cryptocurrency enforcement activities and urged you to reconsider. We have now written this letter in light of recent reports that you held significant amounts of cryptocurrency at the time you made this decision,” the senators wrote. “At the very least, you should have stepped aside because you had a clear conflict of interest.”
Blanche, the second-highest-ranking official at the Justice Department, signed an ethics agreement in February pledging to dispose of his cryptocurrencies within 90 days of approval and not to become involved in any matter that could have a “direct and foreseeable impact on my economic interests in cryptocurrencies” until the Bitcoin or other crypto-related products are sold.
But on April 7, before the sale, he released a memo titled “Ending Prosecutorial Restrictions” halting investigations launched under President Joe Biden. In his memo, Blanche criticized the Biden Justice Department’s hard-line approach to cryptocurrencies, calling them “a reckless strategy of prosecutorial regulation that was poorly conceived and poorly executed.” The memo disbanded the agency’s National Cryptocurrency Enforcement Team, which had won several high-profile convictions related to cryptocurrencies. Blanche said the agency would instead only target terrorists and drug traffickers who used cryptocurrencies illegally, and not the platforms that host them.
Days later, six senators urged Blanche to reconsider, arguing that his decision would encourage sanctions evasion, drug trafficking, fraud and child exploitation.
In the latest letter, they said their fears had come true. They cited an independent report that revealed a sharp increase in illicit crypto activity in 2025, including crimes related to money laundering and human trafficking. They also questioned Blanche’s reasons for changing direction.
“Indeed, President Trump’s economic interests appear to be motivating some of the pardons of criminals convicted of crypto-related crimes,” their letter states. “However, the fact that you held a significant amount of cryptocurrencies at the time you made this decision calls into question your own motives.”
A Justice Department spokesperson told ProPublica last week that Blanche’s cryptocurrency orders were “proactively and appropriately flagged, addressed, and processed.” She did not elaborate or answer questions asking who cleared his act. The department did not respond to requests for comment on the senators’ criticism this week.
In a letter this week, six Democratic senators asked a series of questions seeking details about when, how and by whom Blanche’s deeds were cleared.
They also asked Blanche to submit a written decision received on the legality of the virtual currency enforcement case no later than February 11th. All communications with ethics and Department of Justice officials regarding this matter. and any communications he had with the crypto industry prior to issuing the April memo.
Their request comes about a week after the Campaign Legal Center, a nonpartisan government watchdog group, asked the Justice Department’s inspector general to investigate Blanche. Kedrick Payne, the group’s general counsel and senior director of ethics, argued that Blanche’s order violated the law because it benefited the entire industry, including his own investments. Payne estimated that between issuing the memo and selling, Blanche’s Bitcoin holdings alone rose 34% to $105,881.53. At the time of issuing this memo, Blanche was also invested in several other cryptocurrencies, including Solana and Ethereum, and also held shares in Coinbase.
Under federal conflict of interest laws, government employees are prohibited from participating in “certain matters” that could provide financial benefit to them or their immediate family members, unless they receive a special exemption from the government. Penalties range from up to one year in prison or civil fines of up to $50,000 to up to five years in prison for willfully violating the law.
“The public has a right to know that decisions were made in the public’s best interest and not in the financial interests of government officials,” Payne wrote in a complaint to the inspector general.
Mr. Blanche, a former federal prosecutor in the Southern District of New York, served as Mr. Trump’s lead attorney in the Manhattan trial in which he was convicted of 34 felonies stemming from hush money payments to porn actress Stormy Daniels. Blanche also defended Trump against criminal charges accusing him of conspiring to destroy the 2020 election and possessing classified documents. (These two lawsuits were dropped after Trump was reelected as president.)
Mr. Payne’s group expanded its request Wednesday, asking the Office of Government Ethics and Justice Department ethics officials to investigate whether Mr. Blanche violated ethics agreements, federal conflict of interest laws, and federal laws prohibiting false statements on compliance forms.
