Six senators this week accused Deputy Attorney General Todd Blanche of having a conflict of interest when he shut down investigations into crypto companies, dealers and exchanges and eliminated a law enforcement team dedicated to tracking down crypto-related fraud and money laundering schemes.
A written letter by Democratic Senators Elizabeth Warren, Dick Durbin and Mazie Hirono and signed by Senators Sheldon Whitehouse, Christopher Coons and Richard Blumenthal cited a ProPublica investigation that found Blanche owned at least $159,000 in crypto-related assets when he ordered the work to end.
Durbin, Hirono, Whitehouse, Coons and Blumenthal sit on the Senate Judiciary Committeewhich oversees the Department of Justice.
The same senators before I sent a letter to Blanche raising concerns that his actions could help President Donald Trump’s financial interests in cryptocurrency. In their letter sent Wednesday, they said Blanche’s actions appeared to violate federal conflict of interest law.
“Last year, we sought justification for your puzzling decision to scale back the Department of Justice’s (DOJ) cryptocurrency enforcement efforts and urged you to reconsider your decision. We write now 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 had a blatant conflict of interest and should have recused yourself.” »
Blanche, the second highest ranking official in the Justice Department, signed an ethics agreement in February promising to dispose of his cryptocurrency within 90 days of his confirmation and not to participate in any business that could have a “direct and foreseeable effect on my financial interests in virtual currency” until his bitcoin and other crypto-related products are sold.
But on April 7, before disengaging, he issued a memo titled “Ending Regulation Through Lawsuits” which halted investigations launched under President Joe Biden. In the memo, Blanche condemned the Biden Justice Department’s tough approach to crypto, calling it a “reckless, ill-conceived and poorly executed strategy of regulation-by-prosecution.” The memo dissolves the agency National Cryptocurrency Enforcement Teamwho has won several high-profile crypto-related convictions. Blanche said the agency would instead only target terrorists and drug traffickers who used crypto illegally, not the platforms that hosted them.
Days later, the six senators urged Blanche to reconsider, saying her decision would otherwise help support sanctions evasion, drug trafficking, scams and child exploitation.
In their latest letter, they said their concerns had been addressed. They cited an independent report which revealed that there has been an increase in illicit cryptocurrency activities in 2025, including crimes related to money laundering and human trafficking. They also questioned Blanche’s reasons for this policy change.
“Certainly, President Trump’s financial interests appear to have motivated some of his pardons of felons convicted of cryptocurrency-related crimes,” the letter said. “But the fact that you held significant amounts of cryptocurrency at the time you made this decision calls into question your own motivations.”
A Justice Department spokesperson told ProPublica last week that Blanche’s crypto orders were “properly reported, processed and authorized in advance.” She did not elaborate on or respond to questions asking who authorized her actions. The department did not respond this week to requests for comment on the senators’ criticism.
In this week’s letter, the six Democratic senators asked a series of questions demanding details about how and when Blanche’s actions were exonerated and by whom.
They also asked Blanche to provide, no later than February 11, any written determination she received regarding the legality of her crypto enforcement action; all its communications with ethics and Department of Justice officials on the matter; and all communications he had with the crypto industry before releasing his April memo.
Their requests arrive about a week later the Campaign Legal Centera nonpartisan government watchdog group, asked the Justice Department’s inspector general to investigate Blanche. Kedric Payne, Group General Counsel and Senior Director of Ethics, alleged that Blanche’s orders violated the law because they greatly benefited the industry, including its own investments. Payne estimated that the value of Blanche’s bitcoin holdings alone increased 34%, to $105,881.53, between the time he published the note and the time he divested. At the time he published the note, Blanche also held investments in several other cryptocurrencies, including Solana and Ethereum, and shares in Coinbase.
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Under the federal conflict of interest lawgovernment officials are prohibited from participating in a “special matter” that could financially benefit themselves or their immediate family, unless they have a special exemption from the government. THE the sanctions range from up to one year in prison or a civil fine of up to $50,000 up to five years in prison if someone willfully violates the law.
“The public has a right to know that decisions are made in the best interest of the public and not in the financial interest of any government employee,” Payne wrote in his complaint to the inspector general.
Blanche, a former federal prosecutor for the Southern District of New York, was Trump’s lead lawyer in the Manhattan trial that resulted in his conviction. convicted of 34 crimes from a secret payment to a porn actress, Stormy Daniels. Blanche also defended Trump against criminal charges accusing him of conspiring to overturn the 2020 election and possessing highly classified documents. (Both of these cases were dropped after Trump was re-elected as president.)
The Payne Group has expanded its inquiry request Wednesday, asking the Office of Government Ethics and the Justice Department’s ethics chief to look into whether Blanche violated her ethics agreement, the federal conflict of interest law and the federal law prohibiting false statements on compliance forms.
