U.S. Associate Attorney General Todd Blanche is under attack by Senate Democrats following the recent decision to narrow down the Department of Justice’s (DOJ) code enforcement priorities and disband the crypto enforcement squad.
In a letter to Blanche on Thursday, six Senate Democrats – Officer Majier Hirono (D-Hawaii), Elizabeth Warren (D-Mass.), Dick Durbin (D-Ill.), Sheldon White House (Dr.I), Chris Coons (D-del.), Richard Blumenthell (D-Conn) – National aStepurency eencurry Enculy Enculy Encurse encury (d-conn) – “Free Pass to GIV (ing) Cryptocurrency Money Lander.”
The senator called Blanche’s order that DOJ staff would no longer pursue litigation “due to end-user conduct” against crypto exchanges, mixers or offline wallets, or that no longer result in criminal charges of regulatory violations in cases that contain cryptography, including non-sensical violations.
“By suppressing the DOJ’s liability to enforce federal criminal law when violations are related to digital assets, it suggests that cryptocurrency exchanges, mixers, and other entities trading on digital assets do not need to counter their own money laundering/terrorist financing (terrorist financing) obligations create systemic vulnerability in the digital asset sector.” “Drug traffickers, terrorists, fraudsters and enemies will exploit this vulnerability at scale.”
In a memo to DOJ staff on Monday evening, Blanche cited US President Donald Trump’s executive order on January crypto.
“The Justice Department is not a digital asset regulator,” Blanche wrote, saying that while President Trump’s actual regulators do this work outside the framework of punitive criminal justice, they “will stop pursuing litigation or enforcement measures that have the effect of overlapping regulatory frameworks on digital assets.”
Instead, Blanche urged DOJ staff to focus their enforcement efforts on criminals who use “victimized digital asset investors” and those who use cryptography to promote other criminal schemes such as organized crime, gang funding and terrorism.
Read more: DOJ Axes Crypto Units Like Trump Regulation Pullbacks
But for Senate Democrats, Blanche’s claims don’t completely cut mustard.
“You in your memo argue that DOJs will continue to prosecute people who continue to commit crimes using cryptocurrencies. However, allowing entities that enable these crimes, such as cryptocurrency kiosk operators, to operate outside the federal regulatory framework without the fear of prosecution, will only exploit more Americans.
Lawmakers urged Blanche to reconsider his decision to dismantle the NCET, calling it “an important resource for state and local law enforcement agencies that often lack technical knowledge and skills to investigate cryptocurrency-related crimes.”
New York Attorney General Letitia James raised similar concerns in her own letter to Congress on Thursday, urging lawmakers to pass federal laws to regulate the crypto market. Although her letter itself does not mention Blanche’s memo or NCET’s closure, a press release from her office stressed that her letter “is coming after (DOJ) announced the dismantling of federal criminal cryptocurrency fraud, making it a robust regulatory framework even more important.”
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