Acting US Attorney General Todd Blanche faced backlash Wednesday over the Justice Department’s (DoJ) enforcement of crypto-related crimes and other actions as President Donald Trump’s former personal attorney appeared before a Senate hearing considering his nomination to lead the agency.

The ranking Democrat, Senator Dick Durbin, used part of his opening statement at the Senate Judiciary Committee hearing to criticize Trump’s AG pick for what he described as “dismantling DoJ’s enforcement team and shutting down ongoing criminal investigations of the crypto industry.”

Blanche was reportedly behind the disbanding of the Justice Department’s crypto enforcement unit in April 2025 as deputy attorney general.

Todd Blanche speaking at his confirmation hearing before the Senate Judiciary Committee on Wednesday. Source: Associated Press

The Illinois lawmaker said that Blanche’s order dismantling the DoJ’s crypto unit enable Trump to earn $1.4 billion from his ties to the industry, including his family’s business World Liberty Financial.

He also accused former Binance CEO Changpeng “CZ” Zhao of “broker[ing] a deal to channel $2 billion” into World Liberty, which led to a presidential pardon. The former CEO agreed in 2023 to plead guilty to one felony charge related to the Anti-Money Laundering (AML) regime at the exchange.

“Every smarmy, suspect deal in this administration has cryptocurrency behind the curtain,” said Durbin.

Senate Republicans need a simple majority of lawmakers present to confirm Blanche as AG should his nomination advance in the judiciary panel. With Senator Mitch McConnell still hospitalized after what his team described as a fall that led to pneumonia, the party has a slim 52-47 margin to confirm Blanche, who faces pushback over the DoJ’s actions on immigration and its crypto policies, claims that he would facilitate Trump’s attacks on perceived enemies and the handling of the Jeffrey Epstein files.

Related: Three US senators oppose CLARITY Act on ethics grounds with vote expected soon

Blanche also faced crypto-related questions from Republican Senator Thom Tillis who said he was “concerned that the Binance CEO got pardoned.” Blanche said that he would review the pardon process if confirmed.

Blanche signals DoJ shift on pursuing coders

The Trump AG pick was behind a 2025 memo “ending regulation by prosecution” in the crypto industry and previously held at least $159,000 worth of digital asset-related investments before divesting them to his children and grandchildren.

He has been serving as acting US Attorney General since Pamela Bondi’s firing in April, telling crypto holders shortly after his appointment that officials would not pursue cases into blockchain developers who were not responsible for illicit activity on platforms.  

”[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,” Blanche said at the Bitcoin 2026 conference.

The department still has ongoing cases against developers behind platforms allegedly used for illegal activities. Federal prosecutors are expected to retry Tornado Cash co-founder Roman Storm later this year after a jury failed to reach a verdict on two charges in 2025.

Magazine: Will the crypto lobby’s $189M campaign get CLARITY over the line?

Nasdaq has suspended trading in BNB Plus, a digital asset treasury (DAT) company that burned shareholders on the dream of making money on Binance’s blockchain.

The stock closed its final session at $0.16, down 99.99% on a split-adjusted basis in three years. 

Its reinvention from a biotech stock to a BNB-holding DAT lasted less than 10 months and cost common shareholders nearly everything.

Shares are now downlisted onto OTC Markets Group’s venture tier, under the same ticker symbol. It plans to appeal the delisting via Nasdaq’s Listing and Hearing Review Council, but the suspension is immediate while that appeal is underway.

Not embarrassed, BNB Plus’s delisting announcement stubbornly describes its continued intention to pursue “sophisticated DeFi yield generation with Binance-native opportunities, unlocking access to high-performance digital assets.”

The opportunities that its operations are excluded from now includes the Nasdaq stock exchange.

Ostium, a decentralized perpetual futures exchange, has been hacked on the Arbitrum network via a suspected private key compromise of its oracle signer.

A number of crypto security firms flagged suspicious outflows, with estimates loss estimates ranging from $18 to over $23 million.

Ostium’s official X account confirmed an “issue” with its OLP vault shortly thereafter.

Read more: Supra patched oracle on 11 other chains before $9M Hedera exploit

Ostium allows for trading perpetual futures of stocks, commodities, and forex, and held approximately $63 million of assets, pre-hack, according to DeFiLlama data.

Its OLP vault acts as the protocol’s settlement layer, into which users deposit USDC to open trades on the platform.

Decurity, highlighting an example transaction, explained that “the attacker fed self-signed favorable prices to open and immediately close trades at a profit, draining ~11.86M USDC from the OstiumVault.”

Read more: Cap ‘stabledrop’ U-turn sees cUSD drop $23M, founder denies self dealing claims

DeFi dangers

The loss comes just four days after $9 million was lost from Bonzo Finance on the Hedera network, also due to an exposed price oracle.

Supra, the firm behind the vulnerable oracle had previously patched deployments on 11 other chains in the days leading up to the exploit.

Last week, Summer Finance was hacked, also via a price manipulation attack, losing $6 million. It’s announced today that it will not be able to recover from the incident and will be winding down.

Read more: DeFi platform Summer Finance loses $6M in vault exploit

In the first half of 2026, the DeFi sector has seen over $900 million lost in 87 incidents, with over 80% of the losses caused by compromised private keys or bridge hacks.

Of these, two incidents make up the majority, Drift Protocol and LayerZero/KelpDAO. Following the latter, the contagion threat led Arbitrum’s Security Council to step in and freeze over $70 million of stolen funds. 

It remains to be seen whether Ostium’s loss warrants a similar reaction.

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Acting U.S. Attorney General Todd Blanche faced sharp criticism at a Senate Judiciary Committee hearing on Wednesday as lawmakers weighed his nomination to lead the Justice Department. The backlash centered on how the department has pursued— or deprioritized—crypto-related enforcement, particularly in cases involving the broader developer ecosystem.

Senator Dick Durbin, the ranking Democrat on the committee, used portions of his opening statement to accuse Blanche of weakening DOJ’s crypto enforcement capacity. Durbin referenced Blanche’s reported role in dismantling a DOJ crypto enforcement unit in April 2025 while he was deputy attorney general, arguing that the move left ongoing investigations effectively “shut down” during the Trump administration’s push toward different enforcement priorities.

Key takeaways

• Durbin’s criticism ties Blanche’s prior DOJ actions to a broader shift in crypto enforcement, including alleged “dismantling” of the department’s crypto unit.
• Questions from Republicans—including concerns about Changpeng “CZ” Zhao’s presidential pardon—highlight ongoing political scrutiny of crypto outcomes.
• Blanche signaled a framework that aims to avoid charging developers who are not implicated in third-party wrongdoing.
• The committee vote math remains tight, with the confirmation process dependent on the Senate session’s practical majority rules.

Durbin’s attack on Blanche’s crypto enforcement record

At Wednesday’s hearing, Durbin argued that Blanche’s decisions as deputy attorney general enabled President Donald Trump to benefit financially from ties to the crypto industry. Durbin referenced reports that Blanche helped disband DOJ’s crypto enforcement unit in April 2025, citing Fortune’s reporting on the restructuring.

Durbin also alleged that Trump’s business interests, including family-linked World Liberty Financial, were connected to deals involving cryptocurrency. He further accused Binance’s former CEO Changpeng “CZ” Zhao of “broker[ing] a deal to channel $2 billion” into World Liberty—an accusation Durbin tied to Zhao’s later presidential pardon. The hearing remarks referenced Zhao’s 2023 agreement to plead guilty to a felony charge related to the exchange’s Anti-Money Laundering (AML) compliance.

Blanche’s nomination comes as the political stakes around DOJ leadership and enforcement priorities remain high. In addition to crypto policy, Republicans and Democrats are also disputing DOJ’s broader approach to issues such as immigration enforcement and how the department is handling sensitive political matters.

Confirmation dynamics: narrow path in the Senate

Blanche’s path depends on committee progress and then a Senate confirmation vote if his nomination advances. As of the hearing, the Senate Republican leadership, including Senator Mitch McConnell, faced an operational challenge: McConnell was still hospitalized after a fall described by his team as resulting in pneumonia. That uncertainty contributes to a slim margin in the Senate—described as 52-47 in favor of Republicans—meaning procedural details about attendance could become decisive for confirmation.

While Republicans hold the majority needed for a confirmation if a simple majority of lawmakers present supports the nominee, the nomination also faces targeted scrutiny. The hearing record suggests that lawmakers are not only debating the technical enforcement posture toward crypto, but also broader concerns about whether DOJ leadership will align with the administration’s political goals.

Blanche’s response: avoiding cases against “coders” not tied to wrongdoing

In addition to the political debate, Blanche addressed how DOJ intends to treat crypto software developers. According to a DOJ memo referenced at the hearing and later described in related coverage, the administration’s approach was framed as moving away from enforcement that “regulates by prosecution,” with the memo focused on shifting how the DOJ engages with the crypto sector. The memo was published by DOJ (see this DOJ document).

Blanche told crypto holders shortly after taking the acting role that officials would not pursue cases into blockchain developers who were not responsible for illicit activity on platforms. In remarks carried during industry coverage—specifically at the Bitcoin 2026 conference—Blanche indicated that DOJ would not investigate software developers when the developer is not a third-party user and is not knowingly helping someone commit crimes.

As quoted in the underlying reporting, Blanche described the distinction as follows: if someone is developing software or coding as part of the process, and is neither a user nor knowingly enabling third parties who commit crimes, then DOJ would not investigate or charge them. That is a notable signpost for developers and open-source contributors, because it suggests DOJ’s enforcement posture may be more carefully calibrated around scienter and direct involvement rather than broader theories that could sweep in peripheral actors.

What remains uncertain: ongoing prosecutions and “platform” cases

Even with Blanche’s emphasis on limiting charges against uninvolved coders, the department is not abandoning crypto enforcement altogether. The reporting around the hearing notes that DOJ still has ongoing cases against developers tied to platforms allegedly used for illegal activities. In other words, the line Blanche drew in public comments appears designed to narrow where DOJ looks for culpability, rather than eliminate enforcement.

Federal prosecutors are also expected to retry Tornado Cash co-founder Roman Storm later this year after a 2025 jury failed to reach a verdict on two charges. That procedural detail matters because it indicates that core enforcement actions connected to sanctioned or laundering-linked services are continuing through the courts, even as lawmakers debate whether the DOJ’s approach to developers is shifting.

For readers, the next watchpoint is whether Blanche’s confirmation will lead to measurable changes in charging decisions—especially how prosecutors apply intent and involvement standards to developers. The hearing made clear that political conflict and enforcement strategy will run in parallel, but the real test will be in the cases that move forward and those that get narrowed or dismissed.

Ostium, a decentralized perpetuals trading protocol built on Arbitrum, has paused all trading after security firms reported what they described as an exploit tied to the protocol’s OLP liquidity vault. Blockaid and CertiK both said the incident appeared to stem from a compromise of Ostium’s oracle infrastructure, which feeds external price data into the platform.

Blockaid estimated losses at around $18 million, while CertiK put the figure closer to $22 million. Ostium said it identified an issue affecting the vault and is investigating, but it has not yet confirmed the cause or independently verified the loss estimates.

Key takeaways

• Ostium paused trading after reporting an issue in its OLP liquidity vault.
• Two security firms diverged on losses: Blockaid estimated ~$18M; CertiK estimated ~$22M.
• The suspected root cause is oracle compromise, according to Blockaid and CertiK.
• Ostium urged users to revoke approvals for its contracts while it investigates.

Trading halted and user action requested

On X, Ostium announced it was pausing all trading after identifying a problem affecting the vault. In a subsequent update, the protocol recommended that users temporarily revoke approvals for its contracts “until we can further investigate the recent incident,” framing the guidance around user security.

Ostium’s statements indicate the team has not concluded what happened. The protocol also said it is still investigating the matter and has not confirmed the precise cause behind the exploit or the size of the losses referenced by external security firms.

For traders and liquidity providers, these steps matter because approval management can be directly relevant to how funds could be moved or accessed by smart contracts. Until the protocol provides a more detailed technical assessment, users are essentially operating on partial information—security firm analysis on one side and Ostium’s ongoing review on the other.

Security firms point to oracles, not just smart-contract bugs

Blockaid and CertiK attributed the apparent incident to a compromise of Ostium’s oracle system. Oracles are the mechanism that translates external data—commonly asset prices—into onchain inputs. When an oracle is manipulated or fails, it can distort how a protocol prices assets or calculates settlement conditions, potentially enabling exploits even when core smart contracts are functioning as designed.

Blockaid’s estimate of roughly $18 million in losses and CertiK’s estimate of about $22 million underline that there may be uncertainty in how the damage is measured—particularly in DeFi incidents where attackers can move funds across multiple steps and venues before or after the exploit is detected.

The gap between the estimates also signals why protocols tend to pause operations quickly: with incomplete visibility, the safest near-term action is to stop new trading activity while the affected contracts and oracle pathways are examined.

What Ostium offers—and why the vault issue is central

Ostium is an onchain perpetuals platform for leveraged trading, offering exposure to 75 trading pairs across categories that include stocks, ETFs, commodities, indices, foreign exchange, and cryptocurrencies. Its deployment on Arbitrum places it within the broader wave of offchain-scale improvements offered by Ethereum-compatible networks, but security remains a cross-chain concern: the protocol’s onchain design still depends on offchain components such as oracle data.

The reported issue is specifically linked to Ostium’s OLP liquidity vault. Liquidity vaults are typically used to manage pooled assets that can back trading positions and related settlement flows. If an oracle compromise leads to incorrect accounting—such as mispricing, liquidation logic manipulation, or unfair transfers—vaults can become the conduit through which value is extracted.

DeFi hacks keep targeting infrastructure

The Ostium halt is another reminder that DeFi incidents continue to be persistent even as the industry invests in security tooling and formal best practices. DeFiLlama data cited by Cointelegraph indicated that crypto hacks caused nearly $630 million in losses during April, the highest monthly total since February 2025. DeFi protocols accounted for the majority of that figure, with exploits at KelpDAO and Drift Protocol contributing more than 80% of the April total.

In recent research and commentary, security observers have argued that the threat focus is shifting. Instead of only exploiting weaknesses in smart contracts directly, attackers increasingly go after offchain infrastructure—particularly oracle systems, privileged access controls, and key management processes. That pattern aligns with the Ostium incident as described by Blockaid and CertiK.

Concerns extend beyond immediate technical risk. The repeated occurrence of these incidents has fed questions about whether DeFi is ready to support institutional participation at scale. Earlier coverage highlighted that bridges and other connecting components remain a major security challenge for the sector, and that scaling DeFi for broader adoption requires more than yields—it requires credible operational resilience.

There are also economic constraints. As Cointelegraph previously reported, shrinking DeFi yields can make security costs harder to justify, and institutions may struggle to quantify hack risk versus expected returns. In a May conversation cited by Cointelegraph, the CEO of smart contract security firm Statemind and Symbiotic co-founder Misha Putiatin said institutions increasingly find it difficult to price hack risk, which can reduce appetite for sector exposure despite rising interest in blockchain-based finance.

What to watch next

Investors and users should monitor whether Ostium releases a fuller incident report that clarifies how the oracle system was compromised, which contracts or components were affected, and whether user funds remain recoverable. Equally important will be whether the protocol updates its oracle design or control mechanisms to prevent recurrence—and how quickly trading and liquidity operations can safely resume.