DoJ

Senate Dems Slam DOJ’s Decision to Axe Crypto Unit as a ‘Free Pass’ For Criminals

Published

2 weeks ago

April 11, 2025

U.S. Deputy Attorney General Todd Blanche is under fire from Senate Democrats following his recent decision to narrow 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 decision to cut the National Cryptocurrency Enforcement Team (NCET) as “giv[ing] a free pass to cryptocurrency money launderers.”

The Senators called Blanche’s directive that DOJ staff no longer pursue cases against crypto exchanges, mixers or offline wallets “for the acts of their end users” or bring criminal charges for regulatory violations in cases involving crypto, including violations of the Bank Secrecy Act (BSA), “nonsensical.”

“By abdicating DOJ’s responsibility to enforce federal criminal law when violations involve digital assets, you are suggesting that virtual currency exchanges, mixers, and other entities dealing in digital assets need not fulfill their [anti-money laundering/countering the financing of terrorism] obligations, creating a systemic vulnerability in the digital assets sector,” the lawmakers wrote. “Drug traffickers, terrorists, fraudsters, and adversaries will exploit this vulnerability on a large scale.”

In his memo to DOJ staff on Monday evening, Blanche cited U.S. President Donald Trump’s January executive order on crypto, which promised to bring regulatory clarity to the crypto industry, as the reason for his decision.

“The Department of Justice is not a digital assets regulator,” Blanche wrote, adding that the agency will “no longer pursue litigation or enforcement actions that have the effect of superimposing regulatory frameworks on digital assets while President Trump’s actual regulators do this work outside the punitive criminal justice framework.”

Instead, Blanche urged DOJ staff to focus their enforcement efforts on prosecuting criminals who use “victimize digital asset investors” or those who use crypto in the furtherance of other criminal schemes, like organized crime, gang financing, and terrorism.

For the Senate Democrats, however, Blanche’s claim doesn’t quite cut the mustard.

“You claim in your memo that DOJ will continue to prosecute those who use cryptocurrencies to perpetrate crimes. But allowing the entities that enable these crimes — such as cryptocurrency kiosk operators — to operate outside the federal regulatory framework without fear of prosecution will only result in more Americans being exploited,” the lawmakers wrote.

The lawmakers urged Blanche to reconsider his decision to dismantle NCET, calling it a “critical resource for state and local law enforcement who often lack the technical knowledge and skill to investigate cryptocurrency related crimes.”

New York Attorney General Letitia James raised similar concerns in her own letter to Congress on Thursday, urging lawmakers to pass federal legislation to regulate the crypto markets. Though her letter itself made no mention of Blanche’s memo or the shuttering of NCET, a press release from her office highlighted that her letter “comes after the [DOJ] announced the dismantling of federal criminal cryptocurrency fraud enforcement, making a robust regulatory framework all the more critical.”

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crypto wallets

US Authorities Seize $201,400 Worth of USDT Held in Crypto Wallets Allegedly Intended to Support Hamas

Published

1 month ago

March 28, 2025

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The U.S. Department of Justice says the financial scheme of a terrorist organization was disrupted after authorities confiscated a substantial amount of the group’s crypto funds.

In a statement, the DOJ announces the seizure of $201,400 in USDT held in wallets and accounts set up to support the activities of Hamas, the Palestinian armed group that the US, UK and other nations have designated as a terrorist organization.

The funds were stored in accounts registered in the names of Palestinian individuals living in Turkey and elsewhere, including three wallets with around $111,500 in cryptocurrency and other addresses with assets valued at approximately $89,900.

The DOJ says the funds were traced from purported Hamas fundraising addresses that were used to launder over $1.5 million in crypto since October 2024.

According to court documents, a group chat on an encrypted communications platform encouraged the movement’s supporters to donate money by sending funds to a changing set of at least 17 crypto addresses.

The funds were then funneled into an operational wallet and laundered through a series of crypto exchanges and transactions with the help of suspected financiers and over-the-counter brokers.

FBI Special Agent in Charge Raul Bujanda, of the Albuquerque Field Office, says that disrupting the group’s access to the funds weakened their ability to function.

“This success demonstrates that financial warfare is a critical component to fight terrorism. We will continue to do everything in our power to protect the American people and pursue justice by depriving terrorist organizations of the resources they need to continue their illicit activity.”

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DoJ

$7,000,000 Up for Grabs As Feds Tell Crypto Fraud Victims To Come Recover Their Money

Published

1 month ago

March 24, 2025

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The US government is asking victims of a recently busted crypto fraud scheme to come forward to collect their lost money.

In a press release from the U.S. Attorney’s Office for the Eastern District of Virginia, officials say they have recovered and cleared the title to $7 million of investment fraud proceeds using civil asset forfeiture.

The Justice Department (DOJ) says that the government will now begin inviting the victims of the fraud to submit petitions to have those funds returned to them.

Citing court documents, the DOJ says it uncovered a fraud scheme in which perpetrators used social engineering to lure victims into investing in crypto assets using websites that mirror legitimate platforms.

“The social engineering involved the perpetrators getting to know the victims and earning their trust before introducing them to cryptocurrency investment ideas through the spoofed websites. These websites were set up to mimic legitimate cryptocurrency investment platforms, but funneled victim funds to the perpetrators through over 75 bank accounts in the names of shell companies.

The sites falsely represented to the victims that their investments were making sizeable gains. However, when victims would attempt to make withdrawals, the perpetrators would coerce the victims to send even more money using tactics such as claiming the victims owed taxes on their purported profits.”

The DOJ did not name any individual or organization involved in the case.

US authorities began seizing some of the investment fraud’s proceeds from a bank account set up with a foreign bank in June of 2023. The US subsequently filed a complaint with a District Court to start the civil forfeiture process against the seized funds.

The government ultimately reached a settlement, freeing up $7 million of the seized funds so it could be forfeited to the United States and given back to the victims.

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bank

Bank of America Insider Helps Criminals and Illicit Businesses Launder Funds in Massive Global Conspiracy: US Department of Justice

Published

1 month ago

March 15, 2025

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A Bank of America insider is pleading guilty to boosting a global money laundering conspiracy that aided drug traffickers and other illegal businesses, according to the U.S. Department of Justice (DOJ).

The DOJ says former Bank of America employee Rongjian Li was a member of a money laundering and drug trafficking outfit headed by Jin Hua Zhang.

According to prosecutors, Li used his position at the bank from 2021 through 2022 to help the criminal organization open several accounts.

Zhang’s organization then used the BofA accounts, some of which were registered using forged passports, to launder illicit funds.

“As part of his involvement, when the bank’s financial auditing systems flagged or froze accounts for suspicious activity, Li helped Zhang circumvent the bank’s anti-money laundering protocols and move illicit funds elsewhere.

In addition, Li was observed sitting next to Zhang at a dinner in New York, where Zhang discussed the different fee percentages he charged various criminal groups for drug trafficking and scams.”

Zhang’s organization is believed to have laundered millions of dollars in a span of months, according to the DOJ.

“The investigation revealed that, for a fee, Zhang laundered bulk cash for drug dealers and laundered profits from other illegal businesses. In less than a year, Zhang and his organization laundered at least $25 million worth of drug proceeds and funds from other illegal businesses through undercover agents.”

Li has pleaded guilty to the charge of conspiracy to commit money laundering. He faces a monetary fine and a prison sentence.

“The charge of money laundering conspiracy provides for a sentence of up to 20 years in prison, up to three years of supervised release and a fine of up to $500,000, or twice the amount involved, whichever is greater.”

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