Six U.S. senators are demanding answers after last year’s controversial shutdown of the Justice Department’s specialized crypto enforcement unit — and they’re questioning whether the deputy attorney general’s own crypto holdings played a role. In a letter dated Jan. 28, 2026, Senators Mazie Hirono, Elizabeth Warren, Richard Durbin, Sheldon Whitehouse, Chris Coons and Richard Blumenthal asked Deputy Attorney General Todd Blanche to hand over documents and provide sworn answers about the April 2025 memo that disbanded the National Cryptocurrency Enforcement Team (NCET). The lawmakers want to know why the unit was closed, who signed off on the change, and whether Blanche’s personal crypto investments influenced the decision. Blanche’s memo, issued in April 2025, marked a sharp shift in DOJ practice: it instructed prosecutors to stop treating enforcement actions as a stand-in for financial regulation, declared the department “not a digital assets regulator,” ordered the NCET shuttered, and refocused prosecutorial resources on crimes that merely use crypto as a tool — such as trafficking, terrorism and fraud. The move fundamentally altered how many crypto-related cases would be pursued in federal court. The senators zeroed in on Blanche’s reported crypto holdings. Public ethics filings and reporting place his assets in a broad range — roughly $158,000 to $470,000 — concentrated in major coins such as Bitcoin and Ethereum, plus other crypto-related investments. Blanche agreed to divest, and some sales or transfers occurred weeks to months after the memo was released. Critics contend that sequence raises conflict-of-interest concerns under federal law, which bars officials from participating in matters where they have a financial interest. Supporters counter that DOJ ethics officials reviewed and cleared the move. The policy change has divided stakeholders. Proponents argued it would curb “regulation by prosecution,” pushing market oversight back to regulators rather than criminal courts — a shift industry groups praised as a way to reduce legal uncertainty for exchanges, developers and institutional players. Opponents, including the six senators, warn that scaling back a dedicated enforcement team risks leaving enforcement gaps that could be exploited by bad actors, particularly given the volatile pattern of illicit activity in crypto markets in recent years. In their letter, the senators requested a timeline and supporting records showing when Blanche learned of his holdings, how quickly divestment occurred, who inside DOJ reviewed the memo, and what approvals were obtained. They asked for documents and sworn testimony to determine whether federal conflict-of-interest rules were followed. The request sets up a showdown over both process and policy: whether the DOJ’s reorientation of crypto enforcement was properly vetted, and whether its timing — amid an official with personal crypto exposure — undermines confidence in the department’s decision-making. The answers could shape how enforcement and oversight of digital assets evolve in the U.S. going forward. Read more AI-generated news on: undefined/news

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