DOJ Crypto Unit Closure Sparks Scrutiny Of Deputy AG’s Personal Crypto Stakes

The Justice Department's decision to disband its National Cryptocurrency Enforcement Team (NCET) in April 2025 has drawn renewed scrutiny after six U.S. senators questioned Deputy Attorney General Todd Blanche about potential conflicts of interest stemming from his personal cryptocurrency holdings. Senators Mazie Hirono, Elizabeth Warren, and four others demanded documents and explanations regarding the timing and rationale behind the unit's closure.

The controversy centers on a memo issued by Blanche in April 2025 that redirected prosecutorial focus away from crypto-specific enforcement, stating the department "is not a digital assets regulator." This policy shift coincided with Blanche's reported substantial cryptocurrency investments, raising questions about whether personal financial interests influenced the decision. The senators have invoked federal conflict-of-interest rules in their inquiry.

The NCET's dissolution marked a significant change in U.S. crypto enforcement strategy, prioritizing crimes like trafficking and fraud that merely use cryptocurrency as a tool, rather than targeting crypto-related violations specifically. This policy reversal has created uncertainty in the digital asset space, coming at a time when regulatory clarity remains a pressing industry concern.