Six Democratic senators have accused Deputy Attorney General Todd Blanche of violating federal conflict-of-interest laws. In a letter, they allege he dismantled key crypto enforcement while holding between $158,000 and $470,000 in Bitcoin and Ethereum. The senators questioned his delayed divestment and the transfer of assets to relatives, demanding records and responses by February 11.
Six Democratic senators have accused Deputy Attorney General Todd Blanche of violating federal conflict-of-interest law by significantly reducing cryptocurrency enforcement while holding substantial digital assets. The lawmakers cited his financial disclosures showing holdings between $158,000 and $470,000 in Bitcoin and Ethereum when he issued a pivotal policy memo.
The letter alleges Blanche’s actions may have violated 18 U.S.C. § 208(a), which bars officials from decisions affecting their personal financial interests. “At the very least, you had a glaring conflict of interest and should have recused yourself,” the senators wrote.
Blanche had promised to divest his crypto “as soon as practicable” in February 2025. His subsequent memo disbanded the National Cryptocurrency Enforcement Team and limited prosecution of crypto exchanges.
Rather than fully liquidating, Blanche “sold or transferred” his assets to relatives. The senators question whether this satisfied his divestment obligation and eliminates potential financial influence.
The inquiry demands records of communications with crypto representatives and an explanation for the delayed divestment. The senators set a February 11 deadline for Todd Blanche’b> to provide these responses.
“It’s not automatically improper for a senior DOJ official to hold some crypto, but it becomes inherently risky when that same official is personally dialling up or down crypto enforcement while sitting on a sizeable bag,” said Hong Kong Web3 Association co-chair Joshua Chu.
The senators warned that reducing enforcement would enable illicit activities, citing a Chainalysis report showing a 162% surge in illicit crypto activity last year. They stated their predictions about increased national security risks had proven correct.
“While this story has drawn attention because it involves digital assets, the underlying issue isn’t unique to cryptocurrency—it’s about transparency and potential conflicts of interest,” said BitAML Founder & President Joe Ciccolo. He noted that public officials hold various assets and calling this undue influence is a stretch without evidence of a direct transactional relationship.
