Democrats Criticize DOJ’s ‘Serious Error’ in Dismantling Crypto Crime Unit

Senator Elizabeth Warren, a prominent critic of cryptocurrency, led six Senate Democrats in urging the Department of Justice to reverse its decision to dismantle its crypto investigations and prosecution division.

In a letter sent on April 10 to Deputy Attorney General Todd Blanche, the senators described the move to disband the National Cryptocurrency Enforcement Team as a "grave mistake," arguing it would enable "sanctions evasion, drug trafficking, scams, and child sexual exploitation."

The letter, also signed by Senators Richard Durbin, Mazie Hirono, Sheldon Whitehouse, Christopher Coons, and Richard Blumenthal, condemned the decision. On April 7, Blanche announced the closure of the DOJ’s crypto enforcement team, explaining in a memo that “The Department of Justice is not a digital assets regulator.”

The senators warned that this move effectively allowed "cryptocurrency money launderers" to go unchecked and pointed out that crypto mixing services, used to hide blockchain transactions, are often exploited by criminals. They concluded by saying, "It makes no sense for DOJ to adopt a hands-off stance toward tools being used to facilitate such heinous crimes."

An excerpt of Democrat’s letter to the DOJ. Source: US Senate Committee on Banking, Housing, and Urban Affairs

The senators also raised concerns about the Justice Department's decision not to prosecute various crimes related to digital assets, including violations of the Bank Secrecy Act.

They argued that this move creates a “systemic vulnerability” in the digital assets sector, one that could be exploited by “drug traffickers, terrorists, fraudsters, and adversaries” on a large scale.

The lawmakers have requested a staff-level briefing by May 1, seeking “detailed information on the rationale behind these decisions.”

The letter also critiqued the Trump family's cryptocurrency ventures, hinting at possible conflicts of interest.

A press release accompanying the letter expressed the senators' concerns about possible links between the DOJ’s actions and the crypto ventures of President Donald Trump and his family.

The Trumps are involved with World Liberty Financial, a crypto platform, and its token, and are also planning to launch a stablecoin. Meanwhile, President Trump’s sons, Eric Trump and Donald Trump Jr., are working on a crypto-mining project called American Bitcoin.

The Democrats raised the concern, stating, "Your decisions suggest that President Trump’s involvement in selling cryptocurrency may be influencing the reduction of law enforcement oversight."

In his memo announcing the closure of the crypto enforcement team, Blanche criticized the Biden administration for using the Justice Department to implement a “reckless strategy of regulation by prosecution.”