US Senators press Deputy AG Blanche on alleged crypto conflicts of interest

Six U.S. lawmakers have written a letter to Deputy Attorney General Todd W. Blanche pressing him on potential conflicts of interest related to his decision to scale back the Department of Justice’s cryptocurrency enforcement efforts.

The Wednesday letter claims that Blanche held substantial amounts of crypto when he directed efforts to scale back enforcement of the U.S. digital asset sector, including the disbanding of the National Cryptocurrency Enforcement Team. The letter was signed by Senators Elizabeth Warren, Mazie K. Hirono, Richard J. Durbin, Sheldon Whitehouse, Christopher A. Coons, and Richard Blumenthal.

“Last year, we asked for the rationale behind your puzzling decision to scale back the Department of Justice’s cryptocurrency enforcement efforts and urged you to reconsider,” the letter said. “We write now in light of recent reporting that you held substantial amounts of cryptocurrency at the time you made this decision … At the very least, you had a glaring conflict of interest and should have recused yourself.”

The letter alleges that Blanche held crypto — primarily bitcoin and ether — worth between $158,000 and $470,000 when he published the memo titled “Ending Regulation by Prosecution” in April 2025. This memo directed prosecutors to avoid targeting cryptocurrency exchanges, mixers, and other platforms for the actions of their users, while focusing instead on individuals committing crimes with cryptocurrency.

The Senators said that they had warned that this could facilitate sanctions evasion, drug trafficking, scams, and sexual exploitation of minors. While the DOJ promised to continue its effort to target crypto criminals, the letter said many types of crypto crimes have increased as predicted, including activity linked to Chinese money laundering networks.

The letter laid out a timeline of events, alleging that Blanche sold or transferred his crypto holdings between May and June last year — months after he agreed to divest them in February and after issuing the memorandum in April.

According to the letter, Blanche’s participation in the decision while holding these assets “appears to have violated 18 U.S.C. § 208(a),” which prohibits executive branch employees from participating personally and substantially in a particular matter in which they have a known financial interest. “Willful violations of this provision are punishable by up to five years in prison,” the Senators stated.

Questions

According to ProPublica, the DOJ published a statement last week that the issue pertinent to Blanche “was appropriately flagged, addressed, and cleared in advance.” The statement also said the claims were “nothing more than another baseless character assassination that takes resources away from the important work the Justice Department is doing.”

In response to the DOJ’s statement, the Senators’ letter requested a detailed explanation of how the matter was handled, the specific actions taken, and the individuals involved.

The Senators asked additional questions, including whether Blanche received a written determination under “18 U.S.C. § 208(b)(1)” allowing him to publish the memo, records of communications with ethics officials, and reasons for the delay in divestment despite his promise.

Last week, ethics watchdog organization Campaign Legal Center (CLC) also filed a complaint to the DOJ inspector general to launch an investigation into Blanche’s alleged conflict of interest.

U.S. lawmakers have previously raised concerns about potential conflicts of interest in President Donald Trump’s digital asset initiatives and his pardons of major figures convicted of crypto-related crimes, as he and his family have publicly known ties to crypto projects such as World Liberty Financial.

The letter requested that Blanche and the DOJ provide answers to these questions by Feb. 11, 2026. There has not been a public response yet. The Block has reached out to the DOJ for comment.