Senators Accuse Deputy AG of Conflict of Interest
Six senators have accused Deputy Attorney General Todd Blanche of a conflict of interest after he halted investigations into cryptocurrency companies, dealers, and exchanges, as well as disbanded a specialized enforcement team aimed at tackling crypto-related fraud and money laundering.
A letter from Democratic Senators Elizabeth Warren, Dick Durbin, and Mazie Hirono, supported by Senators Sheldon Whitehouse, Christopher Coons, and Richard Blumenthal, referenced a ProPublica investigation which revealed that Blanche held over $159,000 in crypto assets when he made the decision to end these investigations.
Several of the senators are part of the Senate Judiciary Committee, which oversees the Justice Department. The same group had previously written to Blanche expressing concerns that his decisions might benefit former President Trump’s financial interests in the cryptocurrency industry. They believe Blanche’s actions could be seen as violating federal conflict of interest laws.
In their recent correspondence, the senators reiterated their concerns, noting that Blanche’s significant crypto holdings at the time of his decision suggested a clear conflict of interest, warranting his recusal from related matters.
Blanche, the Justice Department’s second-highest official, had previously signed an ethics agreement requiring him to divest his cryptocurrency holdings within 90 days of confirmation. However, before selling his assets, he issued a memo criticizing the Biden administration’s tough stance on cryptocurrency, branding it as a misguided approach. He disbanded the National Cryptocurrency Enforcement Team, reallocating focus to only target those using crypto for crimes, instead of the platforms themselves.
In the weeks following, the six senators urged Blanche to reconsider his decisions, warning that such changes would support illegal activities, like drug trafficking and human exploitation. Recent reports indicated a spike in illicit cryptocurrency activities, including those linked to money laundering and trafficking, raising alarms about the effects of his policy reversal.
A spokesperson for the Justice Department stated that Blanche’s decisions were thoroughly reviewed and cleared before implementation, although they have not specified who conducted this review. The senators are demanding detailed explanations regarding these clearances and any communication related to Blanche’s policy changes, emphasizing that public interest must prevail over personal financial gains.
