Democrats are condemning the DOJ for what they call a “grave mistake” in dismantling the crypto crime unit.
The Justice Department’s decision to disband its crypto unit has drawn criticism from Senate Democrats, who claim it enables sanctions evasion and scams.
Led by Elizabeth Warren, six Senate Democrats have urged the Department of Justice to reconsider its choice to eliminate the crypto investigations and prosecutions division.
On April 10, the Senators wrote to Deputy Attorney General Todd Blanche, denouncing the termination of the National Cryptocurrency Enforcement Team as a “grave mistake“ that could encourage sanctions evasion, drug trafficking, fraud, and child sexual exploitation.
Senators Elizabeth Warren, Richard Durbin, Mazie Hirono, Sheldon Whitehouse, Christopher Coons, and Richard Blumenthal all signed the letter.
The DOJ’s crypto enforcement team dissolved on April 7, as Todd Blanche clarified in a memo that “The Department of Justice is not a digital assets regulator.”
In their claim, the senators stated that the decision gave a “free pass” to cryptocurrency money launderers and noted that crypto mixing services, which cybercriminals widely use to disguise blockchain transactions, would continue without oversight.
“It makes no sense for DOJ to announce a hands-off approach to tools that are being used to support such terrible crimes,” the letter said.
The senators raised doubts about why the Justice Department had decided not to prosecute a series of crimes related to digital assets, including violations of the Bank Secrecy Act.
They emphasized that this action created a “systemic vulnerability in the digital assets sector,” which “drug traffickers, terrorists, fraudsters, and adversaries” could exploit extensively.
The lawmakers urged the DOJ to provide a staff-level briefing before May 1, seeking “detailed information on the rationale behind these decisions.”
The letter questioned the Trump family’s involvement in crypto projects, implying potential conflicts of interest.
In a press release accompanying the letter, the senators raised concerns regarding the “possible connections” between the DOJ’s decisions and the Trump family’s cryptocurrency ventures.
The Trump family backs the crypto platform World Liberty Financial and its token.
The Trump family’s ventures include backing the platform’s stablecoin launch and creating American Bitcoin, a crypto-mining company led by Eric and Donald Trump Jr.
“Your decisions give rise to concerns that President Trump’s interest in selling his cryptocurrency may be the reason for easing law enforcement scrutiny,” the Democrats stated.
The memo from Blanche, which outlined the crypto enforcement team’s shutdown, blamed the Biden administration for using the Justice Department to execute a “reckless strategy of regulation by prosecution.”
