One of President Donald Trump’s top Justice Department officials ordered prosecutors to back off cryptocurrency cases while he held a six-figure stake in such investments, according to a new investigation.
The memo was issued by Deputy Attorney General Todd Blanche, a one-time personal lawyer to Trump.
According to ProPublica, Blanche entered government with cryptocurrency holdings worth between $159,000 and $485,000 and agreed to divest within 90 days of his March Senate confirmation to avoid conflicts of interest.
Blanche’s April 7 directive—titled “Ending Regulation by Prosecution”—ordered an end to Biden-era investigations into crypto companies, dealers, and exchanges, while also disbanding the DOJ’s National Cryptocurrency Enforcement Team.
ProPublica noted that the memo was sent while Blanche still held Bitcoin valued at between $100,000 and $250,000, along with positions in Solana and Ethereum, and stock in Coinbase. The outlet reported that the market reacted favorably to the directive, with crypto trading spiking.
Legal experts told ProPublica that Blanche, 51, should have recused himself or secured a waiver because his actions could have had a “direct and predictable effect” on his financial interests while he still held Bitcoin and other crypto products.
Ethics specialists told the site the sequence could run afoul of both Blanche’s signed ethics terms and federal conflict-of-interest restrictions, which can carry criminal penalties in willful cases. Virginia Canter, an ethics lawyer, called the situation “an obvious conflict of interest,” according to ProPublica.
Even after Blanche ultimately shed the holdings, ProPublica reported he did so in part by transferring crypto assets to his adult children and a grandchild—moves experts said may be technically permissible under the statute’s narrow family definitions but which cut against the law’s ethical purpose.
Kedric Payne of the Campaign Legal Center told the site: “That purpose is defeated when an official simply gives conflicted assets to adult children.”
The ProPublica investigation also spotlighted Commerce Secretary Howard Lutnick, 64, whose former firm, Cantor Fitzgerald, has significant crypto exposure, and SEC Chair Paul Atkins, whose agency ProPublica said has dropped or settled crypto enforcement cases since Trump took office.
In Blanche’s memo, he derided Biden administration’s approach as “a reckless strategy of regulation by prosecution, which was ill-conceived and poorly executed.” Blanche said the Justice Department would focus on terrorists and drug traffickers using crypto, and not the platforms that facilitated them.
The retreat on enforcement, ProPublica writes, effectively ended a three-year DOJ push that had produced major cases, including convictions tied to large-scale crypto fraud and money laundering.
The department’s National Cryptocurrency Enforcement Team also aided in a multiagency investigation into Binance that found failures to prevent suspicious transactions for terrorist organizations, ProPublica reported.
Binance founder Changpeng Zhao pleaded guilty to anti-money laundering violations, resigned, and served a four-month prison sentence, as the company agreed to pay $4.3 billion. Trump pardoned Zhao in October.
ProPublica framed Blanche’s actions as part of a broader Trump administration push to make the U.S. “the crypto capital of the world,” noting that Trump has nominated at least 216 appointees who held crypto worth between $175 million and $340 million at the time of nomination—far exceeding the total ProPublica said it found among Biden appointees early in his term.
White House press secretary Karoline Leavitt, 28, told ProPublica that the administration was “fulfilling the President’s promise to make the United States the crypto capital of the world.”
The White House referred the Daily Beast to the Justice Department for comment. At the time of publication, the DOJ hadn’t responded.
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