4 months ago
U.S. Deputy Attorney General Todd Blanche is nether occurrence from Senate Democrats pursuing his caller determination to constrictive the Department of Justice’s (DOJ) crypto enforcement priorities and disband its crypto enforcement squad.
In a Thursday letter to Blanche, six Senate Democrats — Sens. Mazie Hirono (D-Hawaii), Elizabeth Warren (D-Mass.), Dick Durbin (D-Ill.), Sheldon Whitehouse (D-R.I), Chris Coons (D-Del.) and Richard Blumenthal (D-Conn.) — blasted his determination to chopped the National Cryptocurrency Enforcement Team (NCET) arsenic “giv[ing] a escaped walk to cryptocurrency wealth launderers.”
The Senators called Blanche’s directive that DOJ unit nary longer prosecute cases against crypto exchanges, mixers oregon offline wallets “for the acts of their extremity users” oregon bring transgression charges for regulatory violations successful cases involving crypto, including violations of the Bank Secrecy Act (BSA), “nonsensical.”
“By abdicating DOJ’s work to enforce national transgression instrumentality erstwhile violations impact integer assets, you are suggesting that virtual currency exchanges, mixers, and different entities dealing successful integer assets request not fulfill their [anti-money laundering/countering the financing of terrorism] obligations, creating a systemic vulnerability successful the integer assets sector,” the lawmakers wrote. “Drug traffickers, terrorists, fraudsters, and adversaries volition exploit this vulnerability connected a ample scale.”
In his memo to DOJ staff connected Monday evening, Blanche cited U.S. President Donald Trump’s January enforcement bid connected crypto, which promised to bring regulatory clarity to the crypto industry, arsenic the crushed for his decision.
“The Department of Justice is not a integer assets regulator,” Blanche wrote, adding that the bureau volition “no longer prosecute litigation oregon enforcement actions that person the effect of superimposing regulatory frameworks connected integer assets portion President Trump's existent regulators bash this enactment extracurricular the punitive transgression justness framework.”
Instead, Blanche urged DOJ unit to absorption their enforcement efforts connected prosecuting criminals who usage “victimize integer plus investors” oregon those who usage crypto successful the furtherance of different transgression schemes, similar organized crime, pack financing, and terrorism.
Read more: DOJ Axes Crypto Unit As Trump’s Regulatory Pullback Continues
For the Senate Democrats, however, Blanche’s assertion doesn’t rather chopped the mustard.
“You assertion successful your memo that DOJ volition proceed to prosecute those who usage cryptocurrencies to perpetrate crimes. But allowing the entities that alteration these crimes — specified arsenic cryptocurrency kiosk operators — to run extracurricular the national regulatory model without fearfulness of prosecution volition lone effect successful much Americans being exploited,” the lawmakers wrote.
The lawmakers urged Blanche to reconsider his determination to dismantle NCET, calling it a “critical assets for authorities and section instrumentality enforcement who often deficiency the method cognition and accomplishment to analyse cryptocurrency related crimes.”
New York Attorney General Letitia James raised akin concerns successful her ain letter to Congress connected Thursday, urging lawmakers to walk national authorities to modulate the crypto markets. Though her missive itself made nary notation of Blanche’s memo oregon the shuttering of NCET, a property merchandise from her bureau highlighted that her missive “comes aft the [DOJ] announced the dismantling of national transgression cryptocurrency fraud enforcement, making a robust regulatory model each the much critical.”
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