Democrats blast DOJ for giving ‘free pass’ to crypto criminals with NCET shutdown
Democratic lawmakers have slammed the Department of Justice’s move to dismantle the National Cryptocurrency Enforcement Team, calling the decision “nonsensical” and a gift to bad actors.
United States Senator Elizabeth Warren, along with six other Senate Democrats, sent a strongly worded letter to Deputy Attorney General Todd Blanche on April 10, urging the DOJ to reverse what they described as a dangerous and misguided shift in enforcement policy.
The backlash follows Blanche’s April 7 memo, which formally disbanded the DOJ’s National Cryptocurrency Enforcement Team.
In the memo, Blanche defended the move by claiming the DOJ is “not a digital assets regulator,” and criticized the previous administration’s approach as a “reckless strategy of regulation by prosecution.”
He has also directed DOJ staff to focus less on cases involving crypto exchanges, mixers, and offline wallets and instead prioritize prosecutions against individuals who directly victimize digital asset investors.
In their letter, lawmakers argued that pulling back on enforcement opens the door to sanctions evasion, drug trafficking, scams, and child exploitation, much of which, they warn, is facilitated by crypto mixing services designed to hide the origins of illicit funds.
The National Cryptocurrency Enforcement Team handled some of the biggest crypto cases in the U.S., including the money laundering case against the cryptocurrency mixing platform Tornado Cash.
The letter described the memo’s approach as a “free pass to cryptocurrency money launderers.”
The Senators also criticized the DOJ’s decision to stop prosecuting violations of the Bank Secrecy Act, warning it would “abdicate DOJ’s responsibility to enforce federal criminal law” in the digital asset sector.
They argued that doing so undermines existing anti-money laundering protections and creates a “systemic vulnerability” that drug traffickers, terrorists, and fraudsters will exploit “on a large scale.”
The letter went on to highlight NCET’s success since its formation in 2021, citing multiple high-profile convictions, multimillion-dollar asset seizures, and support to state and local agencies. Disbanding the team, they argue, weakens law enforcement’s ability to handle complex crypto cases.
Adding a political angle, lawmakers also questioned whether President Donald Trump’s crypto ventures influenced the DOJ’s decision.
Trump family–backed projects have drawn criticism in recent months. World Liberty Financial, which launched its own cryptocurrency last year and plans to introduce a stablecoin, has faced scrutiny over the Trump family’s substantial control and potential conflicts of interest.
“Why would you dismantle a team that is such an important player in fighting cryptocurrency-based crime? 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 lawmakers wrote.
“We urge you to reconsider these decisions,” the Senators wrote, requesting a staff-level briefing by May 1 to explain the rationale behind the DOJ’s move and its potential impact on crypto-related criminal enforcement.
Warren, a vocal critic of cryptocurrencies, has recently gone after several Republicans over their crypto ties, including Trump’s AI and crypto czar David Sacks and Commerce Secretary nominee Howard Lutnick.
