An ethics watchdog group filed a complaint Thursday seeking an investigation into whether President Donald Trump’s criminal defense attorney — now the No. 2 at the Justice Department — broke federal conflict-of-interest law when he issued a new prosecution policy that benefits the cryptocurrency industry.
The complaint comes after a ProPublica investigation revealed last month that Todd Blanche owned at least $159,000 worth of crypto-related assets when he ordered an end to investigations into crypto companies, dealers and exchanges launched during President Joe Biden’s term.
Blanche, the deputy attorney general, issued the order in an April memo in which he also eliminated an enforcement team dedicated to looking for crypto-related fraud and money-laundering schemes.
Blanche had previously signed an ethics agreement promising to dump his cryptocurrency within 90 days of his confirmation and not to participate in any matter that could have a “direct and predictable effect on my financial interests in the virtual currency” until his bitcoin and other crypto-related products were sold.
Later ethics filings show Blanche divested from the investments more than a month after he issued the memo.
Even when he did ultimately get rid of his crypto interests, his ethics records show he did so by transferring them to his adult children and a grandchild, a move ethics experts said is technically legal but at odds with the spirit and intent of the law.
In its complaint this week, the Campaign Legal Center asked the Justice Department’s acting inspector general to launch an investigation.
The complaint alleged that the evidence suggests that Blanche “blatantly and improperly influenced DOJ’s digital asset prosecution guidelines while standing to financially benefit.”
“The public has a right to know that decisions are being made in the public’s best interest and not to benefit a government employee’s financial interests,” Kedric Payne, the organization’s general counsel and senior director of ethics, wrote in the complaint. The inspector general’s office “should investigate and determine whether a criminal violation occurred.”
Under the April 7 memo titled “Ending Regulation by Prosecution,” Blanche condemned the Biden Justice Department’s tough approach toward crypto as “a reckless strategy of regulation by prosecution, which was ill conceived and poorly executed.” The memo disbanded the agency’s National Cryptocurrency Enforcement Team, which had won several high-profile crypto-related convictions.
Blanche said the agency would instead target only the terrorists and drug traffickers who illicitly used crypto, not the platforms that hosted them.
The market reacted favorably; crypto trading spiked.
In an ethics filing he electronically signed in June, Blanche said his bitcoin and other cryptocurrency investments—including Solana, Cardano and Ethereum—“were gifted in their entirety to my grandchild and adult children.” Financial disclosure records don’t provide exact amounts but instead a broad range for the worth of a government official’s investment. At that point, Blanche’s records show his transfers to his family members were worth between $116,000 and $315,000. He said he sold additional crypto-related investments worth between $5,000 and $75,000. The divestment took place in late May and early June, the ethics filing said.
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