Policy, Sen. Elizabeth Warren, DOJ In a letter to Deputy Attorney General Todd Blanche on Thursday, the six lawmakers urged him to rethink his newest dedication to disband the DOJ’s crypto enforcement squad.
U.S. Deputy Attorney General Todd Blanche is under fire from Senate Democrats following his newest dedication to slender the Department of Justice’s (DOJ) crypto enforcement priorities and disband its crypto enforcement squad.
In a Thursday letter to Blanche, six Senate Democrats — Sens. Mazie Hirono (D-Hawaii), Elizabeth Warren (D-Mass.), Dick Durbin (D-Ill.), Sheldon Whitehouse (D-R.I), Chris Coons (D-Del.) and Richard Blumenthal (D-Conn.) — blasted his dedication to cut the National Cryptocurrency Enforcement Team (NCET) as “giv[ing] a free pass to cryptocurrency money launderers.”
The Senators known as Blanche’s directive that DOJ staff not pursue situations in opposition to crypto exchanges, mixers or offline wallets “for the acts of their end users” or carry felony costs for regulatory violations in situations involving crypto, along with violations of the Bank Secrecy Act (BSA), “nonsensical.”
“By abdicating DOJ’s responsibility to enforce federal criminal law when violations involve digital assets, you are suggesting that virtual currency exchanges, mixers, and other entities dealing in digital assets need not fulfill their [anti-money laundering/countering the financing of terrorism] obligations, creating a systemic vulnerability in the digital assets sector,” the lawmakers wrote. “Drug traffickers, terrorists, fraudsters, and adversaries will exploit this vulnerability on a large scale.”
In his memo to DOJ staff on Monday evening, Blanche cited U.S. President Donald Trump’s January authorities order on crypto, which promised to hold regulatory readability to the crypto enterprise, because the rationale for his dedication.
“The Department of Justice is not a digital assets regulator,” Blanche wrote, together with that the corporate will “no longer pursue litigation or enforcement actions that have the effect of superimposing regulatory frameworks on digital assets while President Trump’s actual regulators do this work outside the punitive criminal justice framework.”
Instead, Blanche urged DOJ staff to focus their enforcement efforts on prosecuting criminals who use “victimize digital asset investors” or those who use crypto throughout the furtherance of various felony schemes, like organized crime, gang financing, and terrorism.
Read additional: DOJ Axes Crypto Unit As Trump’s Regulatory Pullback Continues
For the Senate Democrats, nonetheless, Blanche’s declare doesn’t pretty scale back the mustard.
“You claim in your memo that DOJ will continue to prosecute those who use cryptocurrencies to perpetrate crimes. But allowing the entities that enable these crimes — such as cryptocurrency kiosk operators — to operate outside the federal regulatory framework without fear of prosecution will only result in more Americans being exploited,” the lawmakers wrote.
The lawmakers urged Blanche to rethink his dedication to dismantle NCET, calling it a “critical resource for state and local law enforcement who often lack the technical knowledge and skill to investigate cryptocurrency related crimes.”
New York Attorney General Letitia James raised comparable points in her private letter to Congress on Thursday, urging lawmakers to cross federal legal guidelines to handle the crypto markets. Though her letter itself made no level out of Blanche’s memo or the shuttering of NCET, a press launch from her office highlighted that her letter “comes after the [DOJ] announced the dismantling of federal criminal cryptocurrency fraud enforcement, making a robust regulatory framework all the more critical.”
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