Top DOJ Official Shut Down Crypto Enforcement While Holding Cryptocurrency Assets
By Corey G. Johnson and Al Shaw | December 22, 2025
In a striking development that raises significant ethical concerns, Todd Blanche, the second-highest official at the U.S. Department of Justice (DOJ), halted enforcement actions against cryptocurrency companies while holding substantial personal investments in digital assets. This revelation comes from an investigative report by ProPublica and highlights the complex challenges of regulating the emerging crypto industry amid government conflicts of interest.
Background:
Todd Blanche, known for serving as President Donald Trump’s personal attorney during his New York criminal trial last year, assumed his DOJ role following Senate confirmation in March 2025. At the time of his nomination, Blanche disclosed cryptocurrency holdings estimated between $159,000 and $485,000. To address potential conflicts, he entered into a government ethics agreement requiring him to divest these digital assets within 90 days of confirmation and to recuse himself from any matters directly impacting his crypto investments until they were sold.
Actions in Office:
Despite this agreement, within roughly one month on the job and before divesting his holdings, Blanche issued a memo ordering the immediate cessation of investigations into crypto companies, dealers, and exchanges that had been initiated during President Joe Biden’s administration. He disbanded an enforcement team tasked with probing crypto-related frauds and money laundering cases. Moreover, Blanche’s directive pledged DOJ support to a crypto working group formed under Trump’s administration, which aimed to position the United States as a global leader in digital currency.
Legal experts and former federal ethics officials interviewed by ProPublica condemned these actions as clear violations of federal conflict-of-interest laws and Blanche’s ethics agreement.
Virginia Canter, a former ethics counsel for multiple administrations, said, “If you are invested in that industry and now making a decision that could affect whether or not the DOJ is gonna pursue prosecutions, that’s an obvious conflict of interest.”
Divestment and Ethics Concerns:
Blanche eventually divested his crypto assets; however, records indicate that he transferred ownership to his adult children and a grandchild. While this move is technically allowed under current law, many ethics experts argue it undermines the spirit and intent of conflict-of-interest regulations designed to prevent undue influence.
Broader Crypto Influence in the Trump Administration:
Blanche’s case is emblematic of a broader pattern within the Trump administration to relax crypto regulation aligned with the president’s goal of making the U.S. the “crypto capital of the world.” Since Trump’s inauguration, at least 216 political appointees were found to collectively own between $175 million and $340 million in cryptocurrency assets. In contrast, during the first two years of the Biden administration, appointees held substantially less—less than $7 million in total.
Among Trump’s crypto-friendly appointments are significant figures with regulatory authority over financial markets:
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Commerce Secretary Howard Lutnick, formerly the CEO of Cantor Fitzgerald, a financial firm heavily invested in crypto and principal banker for the major stablecoin issuer Tether. Lutnick transferred his stake in Cantor Fitzgerald to his children after signing an ethics agreement but had already taken numerous pro-crypto initiatives, including promoting a Bitcoin strategic reserve and publishing economic data on key blockchains.
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SEC Chair Paul Atkins, who reportedly owned up to $6 million in crypto-related businesses before his April 2025 confirmation. Since then, the Securities and Exchange Commission under Atkins has attenuated enforcement actions against cryptocurrency firms. Despite commitments to divest, documentation relating to his crypto asset sales remains unclear.
A spokesperson for the Commerce Department confirmed that Lutnick received a limited waiver allowing him to work on general issues potentially impacting his former firm during the stake transfer process. The Department stated Lutnick fully complied with his ethics agreement and did not gain or lose economically from the divestment.
Industry Ties and Political Influence:
During the 2024 election season, Donald Trump expressed strong support for the cryptocurrency sector, promising to ease Biden-era regulatory restrictions if re-elected. The crypto industry responded with significant financial backing for Trump and allied Republican candidates.
Trump also personally engaged with the crypto space—alongside his sons, he launched a cryptocurrency business called World Liberty Financial during the campaign. Following his victory, he and former First Lady Melania Trump issued meme coins, allowing supporters to transact in digital tokens branded with his name.
Within days of taking office, President Trump signed an executive action encouraging digital asset growth and began appointing officials aligned with his pro-crypto vision.
Ethical Implications:
James Thurber, a scholar of federal ethics reform, criticized the Trump administration’s approach to regulatory conflicts, particularly in the rapidly evolving crypto industry. The Blanche case underscores the urgent need for clearer and stricter ethical frameworks as government officials increasingly hold financial interests in sectors they regulate.
DOJ Response:
A staff representative for Todd Blanche declined to comment on the matter, and the Department of Justice has not issued a public statement addressing the findings.
This investigative report was originally published by ProPublica. For more detailed insights and related coverage, please visit ProPublica’s website.
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