The United States Deputy Attorney General, Todd Blanche, is under fire of the Senate Democrats after his recent decision to reduce the priorities of crypto -knowledge of the Department of Justice (Department of Justice) and dissolve his Cryptocurrency Compliance Squadron.
In a letter from Thursday to Blanche, six Senate-Sens Democrats. Mazie Hirono (D-Hawaii), Elizabeth Warren (D-Mass.), Dick Durbin (D-blade), Sheldon Whitehouse (Dr.i), Chris Coons (D-Del.) And Richard Blucenthal (D-Conn.).[ing] A free pass to cryptocurrency money washing machines. “
The senators described Blanche’s directive that the DOJ personnel no longer pursues cases against cryptographic exchanges, mixers or wallets offline “by the acts of their end users” nor does it bring criminal charges for regulatory violations in cases that involve cryptography, including the violations of the Bank’s Secrets Law (BSA), “Nosensic”. “
“By abdicating the DOJ’s responsibility to enforce federal criminal law when violations involve digital assets, you suggest that virtual currency exchanges, mixers and other entities that deal with digital assets do not need to comply with their [anti-money laundering/countering the financing of terrorism] obligations, creating systemic vulnerability in the digital asset sector, “the legislators wrote.” Drug traffickers, terrorists, scammers and adversaries will exploit this large -scale vulnerability. “
In his memorandum to the personnel of the Justice Department on Monday night, Blanche cited the executive order of the US President Donald Trump on cryptography, which promised to provide regulatory clarity to the cryptographic industry, as the reason for his decision.
“The Department of Justice is not a digital asset regulator,” Blanche wrote, adding that the agency “will no longer seek litigation or compliance actions that have the effect of superimposing regulatory frameworks on digital assets, while the real regulators of President Trump do this work outside the punitive framework of criminal justice.”
Instead, Blanche urged DOJ staff to focus their application efforts on the prosecution of criminals who use “victimized digital asset investors” or those who use cryptography in the promotion of other criminal schemes, such as organized crime, gang financing and terrorism.
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However, for Senate Democrats, Blanche’s statement does not cut mustard.
“You affirm in your memorandum that the Department of Justice will continue to process those who use cryptocurrencies to perpetrate crimes. But allow entities that allow these crimes, such as operators of cryptocurrency kiosks, operate outside the federal regulatory framework without fear that the prosecution only will result in which more Americans are exploited,” the legislators wrote.
Legislators urged Blanche to reconsider their decision to dismantle NCET, calling him a “critical resource for the application of state and local law that often lacks technical knowledge and the ability to investigate crimes related to cryptocurrencies.”
New York Attorney General, Letitia James, raised similar concerns in his own letter to Congress on Thursday, urging legislators to approve federal legislation to regulate cryptographic markets. Although his letter did not mention the Blanche memorandum or the closing of NCET, a press release from his office stressed that his letter “comes after [DOJ] Announced the dismantling of the federal application of criminal cryptocurrency fraud, making a robust regulatory framework even more critical. ”
