DOJ Ends Powell Probe, Easing Path for Warsh Nomination

• DOJ ends probe into Jerome Powell, easing pressure as Kevin Warsh’s nomination gains traction.
• Thom Tillis tied support to the probe’s end, making the DOJ decision pivotal for Senate backing.
• Warsh signals friendlier crypto stance, raising hopes for faster policy moves and clearer regulation.

The U.S. Department of Justice has abruptly ended its probe into Federal Reserve Chair Jerome Powell. U.S. Attorney Jeanine Pirro confirmed the move on X, citing a transfer of oversight to the Federal Reserve’s inspector general. 

The closure comes as lawmakers link the investigation directly to Kevin Warsh’s nomination. Senator Thom Tillis had warned he would block support unless the probe ended. Hence, the DOJ’s decision now reshapes the confirmation landscape and accelerates expectations around Powell’s replacement before his term expires.

Political Leverage and Senate Calculations

Tillis played a decisive role in the timeline of events. He openly tied his vote to the investigation’s outcome during the Senate Banking Committee hearing. 

Additionally, multiple reports indicated senior officials had already signaled plans to drop the probe. This alignment strengthened pressure on the Justice Department.

Pirro stated, “Accordingly, I have directed my office to close our investigation as the IG undertakes this inquiry.” However, she added a warning. She said authorities could reopen the case if facts justify further action. As a result, uncertainty still lingers despite the closure.

During the hearing, Tillis told Warsh he supported him but needed the probe resolved. Therefore, the DOJ’s move likely secures his backing. This shift could prove decisive in the Senate Banking Committee’s vote.

Crypto Policy Outlook and Market Signals

Warsh’s nomination carries broader implications for U.S. digital asset policy. He told lawmakers that digital assets already integrate into the financial system, calling them “already part of the fabric of our financial services industry in the United States.” His stance signals a more accommodating regulatory approach compared with the current policy direction.

Warsh also holds investments in crypto firms, including dYdX and Dapper Labs, reinforcing expectations of a market-friendly posture. Experts say his confirmation could unlock momentum for stalled legislation. 

Grayscale Head of Research Zach Pandl pointed to a potential sequence of events, writing, “This is how dominoes will fall for CLARITY Act imho.”

Prediction markets have already adjusted. Polymarket data shows the probability of confirmation by May 15 has climbed to 82%, up from 28% earlier. The shift suggests investors now expect a quicker leadership transition at the Federal Reserve, alongside faster progress on crypto regulation.

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