Blanche grilled on DOJ crypto unit shutdown and CZ pardon in

Acting US Attorney General Todd Blanche faced pointed Senate Judiciary Committee scrutiny over the Justice Department’s post-2025 crypto enforcement posture and President Donald Trump’s pardon of former Binance CEO Changpeng “CZ” Zhao. Blanche said he would review the pardon process if confirmed and repeated that DOJ should not pursue coders who are not knowingly facilitating crimes.

Key Takeaways

Sen. Dick Durbin accused Todd Blanche of “dismantling DoJ’s enforcement team and shutting down ongoing criminal investigations of the crypto industry.”
The Justice Department’s crypto enforcement unit was disbanded in April 2025, a move tied to Blanche’s tenure as deputy attorney general.
Republican Sen. Thom Tillis flagged concern that the former Binance CEO received a pardon, and Blanche committed to review the pardon process if confirmed.
Federal prosecutors are expected to retry Tornado Cash co-founder Roman Storm later this year after a 2025 jury deadlocked on two charges.

Blanche’s DOJ Nomination Hearing Reopens the Crypto Enforcement Fight

Todd Blanche’s confirmation hearing put federal crypto enforcement back on the table as a live political issue, not a background risk. In opening remarks at the Senate Judiciary Committee, Sen. Dick Durbin framed Blanche’s recent DOJ posture as a pullback, criticizing what he described as “dismantling DoJ’s enforcement team and shutting down ongoing criminal investigations of the crypto industry.”

The hearing also pulled the Binance pardon into the same frame. Durbin argued that crypto policy and enforcement choices are now inseparable from questions about political influence, saying, “Every smarmy, suspect deal in this administration has cryptocurrency behind the curtain,” while pressing allegations tied to Trump-linked crypto business interests.

The April 2025 Crypto Unit Shutdown and the Politics Around It

A key factual anchor in the hearing was the reported April 2025 disbanding of the Justice Department’s crypto enforcement unit while Blanche served as deputy attorney general. That unit functioned as a specialized team focused on investigating and prosecuting crypto-related crimes, and its removal signals a structural shift away from a dedicated crypto enforcement footprint.

Durbin went further, alleging Blanche’s order dismantling the unit enabled Trump to earn $1.4 billion from ties to the crypto industry, including the Trump family’s World Liberty Financial. He also accused CZ of “broker[ing] a deal to channel $2 billion” into World Liberty that led to a presidential pardon. Those claims were presented as allegations during the hearing, and the underlying deal details were not substantiated in the provided record.

Blanche’s own disclosure adds another layer of optics. He previously held at least $159,000 in digital asset-related investments and divested them to his children and grandchildren.

Coder Liability: Blanche’s Bitcoin 2026 Stance vs Active DOJ Developer Cases

Blanche has tried to draw a bright line around developer liability, explicitly pushing back on “regulation by prosecution,” a phrase used to describe shaping industry behavior through criminal cases in the absence of clear rules. At the Bitcoin 2026 conference, he said: “[I]f you are developing software, if you are a coder, if you are part of that process and you are not the third-party user, and you are not helping and knowing the third party is using what you developed to commit crimes, you are not going to be investigated and not going to be charged,”

That posture collides with the DOJ’s current reality. The department still has ongoing cases against developers behind platforms allegedly used for illegal activities, and prosecutors are expected to retry Tornado Cash co-founder Roman Storm later this year after a 2025 jury failed to reach a verdict on two charges. Tornado Cash, a mixing protocol, sits at the center of the developer-liability debate because the government’s theory necessarily tests where “writing code” ends and “facilitating crime” begins.

Signals Traders Should Track From a Blanche-Led DOJ

The next catalyst is procedural, not market-driven. Any announced date for the Senate Judiciary Committee vote, followed by a full-Senate confirmation vote, will define the timeline for whether Blanche’s stated posture becomes departmental policy.

The vote math is tight enough to matter. Senate Republicans need a simple majority of lawmakers present to confirm Blanche if the nomination advances out of committee. Republicans hold a 52-47 margin, and Sen. Mitch McConnell remains hospitalized after a fall that led to pneumonia, per his team, which raises turnout sensitivity in a close confirmation.

On the enforcement side, traders should watch for specifics on what Blanche’s promised “review” of the pardon process would entail, including scope and timeline, and whether it triggers any formal DOJ action. Docket updates for the expected Roman Storm retrial, especially pretrial motions, are likely to clarify the government’s theory of developer liability. Any DOJ messaging or internal memos after the hearing that further define priorities following the April 2025 unit shutdown would be the cleanest signal of how much of this is rhetoric versus operating procedure.

Enforcement Risk May Shift From Developers to Gatekeepers—But the Storm Retrial Is the Tell

I treat this hearing as a sentiment catalyst more than a fundamental shift, because the only durable change on the record is structural: the reported April 2025 disbanding of the crypto enforcement unit. If Blanche is confirmed, that setup can keep pushing DOJ away from a dedicated crypto-focused footprint, but the market only gets paid if charging decisions actually change.

The threshold that matters is whether Blanche’s coder-safe-harbor line survives contact with active prosecutions. The real test is whether the Roman Storm retrial narrows the government’s theory of liability or doubles down on it. If that theory tightens, the setup starts to look structural rather than narrative-driven, and enforcement risk migrates from developers toward identifiable gatekeepers like exchanges and compliance chokepoints.

Sources

Cointelegraph