It appears to be official now. According to the U.S. Department of Justice, when illicit activity is routed via crypto infrastructure, then it no longer qualifies as money laundering. Earlier this week the Department of Justice's deputy attorney general Todd Blanche sent out an internal staff memo saying that the digital asset industry (read: crypto) is "critical to the nation’s economic development." (Editor's note: it's not.) As such, staff have been instructed to stop targeting crypto platforms such as exchanges, mixers like Tornado Cash and ChipMixer, and offline wallets for the "acts of their end users."  What does "the acts of their end users" mean? Further clarity arrives deeper into Blanche's memo. It helpfully draws attention to how cartels operating in the fentanyl trade often use digital assets. This is well known. Tether, for instance, is a popular payments platform in the fentanyl trade. (See here, here, and here). And yet, the Department goes on to explain that while it will continue to pursue cartels, terrorist organizations, and other illicit enterprises for their financial crimes, it "will not pursue actions against the platforms that these enterprises utilize to conduct their illegal activities." This marks a radical departure from long-established financial law on Planet Earth, where financial institutions are generally held responsible for the "acts of their end users," and are pursued when criminals use them to "conduct their illegal activities." It's what's known in law as money laundering. Money laundering is a two-sided crime. There's the first leg: a criminal who has dirty money. And there is the second leg: the criminal's counterparty, a financial intermediary (a bank, crypto exchange, remittance platform, money courier, or helpful individual) who processes the dirty funds. Both legs are prosecutable. That's precisely what happened to both TD Bank and its cartel-linked customers when they were charged last year. Financial providers are held liable for the crimes of their users. The same two-sidedness goes for sanctions evasion. There is the sanctioned party and there is the financial platform that facilitates their evasion. Both are indictable.   If, as Blanche suggests, digital asset platforms are no longer to be targeted for the "acts of their end users," that's effectively saying that the second leg of a money laundering or sanctions violation is no longer a violation, at least not when a crypto platform is involved. So if cartel deposits dirty money at an exchange like Binance which facilitates their crypto transactions, the exchange won't be pursued. Only the cartel will be. In effect the entire technology has been handed a get-out-of-money-laundering-jail-free card. A detached observer could safely assume that crypto platforms will respond by easing up on their compliance measures—they won't be indicted, after all—which, in turn, will allow more bad actors to make use of their services. The memo provides more details. It's quite likely that both the ongoing Tornado Cash case (which I've written about extensively) and the ChipMixer case will be dropped, as the memo explicitly states that the Department will no longer target mixing and tumbling services. Tornado Cash, a smart-contract based mixer, operates with a large proportion of its infrastructure running through automated code, whereas first-generation mixers like ChipMixer are entirely human-operated. The latter had mostly disappeared thanks to a series of successful criminal convictions, but will spring back into action as the threat of indictment recedes—leading to more anonymity for the entire system, including for criminals. The memo's prohibition against Department lawyers targeting "offline wallets" likely refers to "unhosted wallets," which presumably applies to stablecoins—a highly popular type of crypto token pegged to national currencies. Stablecoin users can either hold balances of a stablecoin like Tether or USDC in unhosted format, within their personal crypto wallets, or hold them with the issuer for redemption into actual dollars, in which case they become "hosted." The implication seems to be that if unhosted stablecoins are used by bad actors, the issuers themselves won't be targeted. It's a fantastic policy—if your goal was to encourage fentanyl cartels to use stablecoins. This decriminalization of crypto money laundering is a ratification of how much of the crypto ecosystem already operates. Just last week, for example, I wrote about stablecoin issuers like Tether and Circle allowing Garantex, a sanctioned Russian exchange, to hold balances of their stablecoins. The issuers seem to believe that providing access to illicit end users like Garantex is legal. And now, it seems, the government has confirmed their view by no longer targeting unhosted wallets for the "acts of their end users." Now that we've explored some of the immediate legal and technical consequences of this decision, it's worth asking: who on earth benefits from this sudden shift in policy? Because clearly most people will be made worse off.  I'm only speculating, but here's who this policy may be designed to appease and/or reward: Trump-voting libertarians who have arrived at the odd belief that money laundering shouldn't be a crime. San Francisco crypto entrepreneurs who want to create financial platforms on the cheap, without the burden of building expensive compliance programs to prevent criminals usage. These entrepreneurs also want their crypto platforms to have access to bank accounts, but banks have been hesitant due to the high risk of crypto-based money laundering. Now that crypto has immunity, banks no longer have to worry. Crypto entrepreneurs voted for Trump, funded him, and are a big part of his administration. This is their payback. Trump himself who seems intent on building a murky authoritarian system of bribery and patronage à la Putin or Orban. This system requires money laundering-friendly financial infrastructure, and the Department's memo may be an early step to creating it. (The Trump family, with its many crypto-based entrepreneurial efforts, is also part of the second group.) In the long term, banks and other traditional providers may benefit, too. With crypto-based finance now unburdened of a major law, every single financial provider operating outside of this crypto-friendly zone, such as traditional banks and fintechs, will be incentivized to switch their database infrastructure over to crypto in order to qualify for this loophole. That means shifting your Wells Fargo U.S. dollar savings account over to a blockchain-based dollar saving account. Doing so will allow banks and fintechs to cut compliance costs and increase their profits. Once the entire financial sector has migrated through the loophole, it will no longer be a crime to launder funds for criminals. And with mixers no longer being charged by the Department of Justice, that means blanket anonymity for everyone. As far as the public's welfare goes, the memo is awful. Like theft and fraud, money laundering is immoral and should be punished. Giving one stratum of society a free pass from any law, whether that be money laundering or theft or murder, erodes trust in government and the financial-legal system. More broadly, society's money laundering laws are a key defence against all types of other crimes. The so-called predicate offences to money laundering such as robbery, human smuggling, and corruption become much more tricky to carry out when, thanks to money laundering laws, the financial system does its best to shut them out. The dissuasive effect engendered by this effort stops many would-be criminals from ever leaving the licit economy. Take away those laws and the case for becoming a criminal becomes much more persuasive.

Note: Mortgage rates are from MortgageNewsDaily.com and are for top tier scenarios. Producer Price Index for March from the BLS. The consensus is for a 0.2% increase in PPI, and a 0.3% increase in core PPI. University of Michigan's Consumer sentiment index (Preliminary for April).

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What’s in the news? Talking about the news in March, give nwhat’s been happing on the tariff front over the last few weeks, seems a bit pointless. We entered March with a lot of drama about Ukraine, and some notable ‘ceasefire’ activity on the diplomatic front. We finished March waiting for ‘liberation day’, April 2nd,… Continue reading Mar ’25: Anticipating tariffs →

What this means: On a weekly basis, Realtor.com reports the year-over-year change in active inventory and new listings. On a monthly basis, they report total inventory. For March, Realtor.com reported inventory was up 28.5% YoY, but still down 20.2% compared to the 2017 to 2019 same month levels.   Now - on a weekly basis - inventory is up 30.3% YoY. Realtor.com has monthly and weekly data on the existing home market. Here is their weekly report: Weekly Housing Trends View—Data for Week Ending April 5, 2025 • Active inventory climbed 30.3% from a year ago • New listings—a measure of sellers putting homes up for sale—increased 8.6% • The median list price increased 0.1% year over year Here is a graph of the year-over-year change in inventory according to realtor.com.  Inventory was up year-over-year for the 74th consecutive week.   New listings have increased but remain below typical pre-pandemic levels. Median prices are mostly unchanged year-over-year.