Donald Trump’s bid to reshape U.S. monetary policy took a concrete step forward Friday after the Department of Justice quietly dropped a criminal inquiry that had threatened to stall his choice to lead the Federal Reserve.
Why it matters for crypto
Kevin Warsh, Trump’s nominee to replace Fed Chair Jerome Powell, has significant personal wealth that includes crypto holdings. If confirmed, Warsh would join the Fed board at a time when the central bank’s stance and regulatory posture matter for digital-asset markets—particularly rules around stablecoins and broader crypto oversight. More Trump-aligned officials on the Fed could shift both interest-rate expectations and regulatory priorities that affect crypto firms and token issuers.
What changed
Senate Republicans had faced a potential roadblock after Republican Senator Thom Tillis warned he would block Warsh’s confirmation while the DOJ maintained an investigation into cost overruns on a Fed building renovation linked to Powell. That threat could have left Powell in place well beyond the May 15 expiration of his term if the confirmation process stalled.
On Friday, the DOJ told the Fed’s inspector general to examine the renovation and produce a report, and its D.C. office said it was closing the criminal investigation for now while the inspector general conducts its review. The office also warned it could reopen a criminal probe if new facts warrant it. After the announcement, markets that track confirmations reacted fast: Kalshi prediction-market odds for Warsh’s confirmation before May 15 jumped from roughly 30% to over 80%.
Nominee’s stance and next steps
Warsh testified at a Senate hearing this week and insisted he would exercise independence from the White House if confirmed. With the DOJ investigation no longer hanging over the process, a Republican-controlled Senate appears positioned to move more quickly on a final vote.
Political reactions
Democrats slammed the decision as political maneuvering. Senate Banking Committee ranking member Elizabeth Warren accused the administration of clearing the path for “President Trump’s sock-puppet Kevin Warsh” and criticized the DOJ for still pursuing litigation against Fed Governor Lisa Cook. Tillis, by contrast, called Warsh “a great nominee” and said he would back Warsh in committee once the DOJ paused the probe.
Bottom line
With the DOJ stepping back and the inspector general taking the lead on the renovation review, the most significant procedural obstacle to Warsh’s confirmation appears to be gone for now. For crypto markets, the key takeaway is that a pro-Trump Fed leadership team would likely tilt policy discussions—and regulatory rulemaking—at a critical moment for stablecoins and the broader digital-asset industry.
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