Mother-in-law doesn’t like me because I don’t want a relationship with her daughter

I don't speak to my sister in law anymore, as she crossed the line and insulted / was disrespectful to my children. I am happy with my decision and will always stand up for my kids. The problem is, my mother in law blames me now for the no-contact , not being around on the holidays etc. so instead of making her daughter accountable and responsible for her actions, she is only focused on my reaction. My husband also is on board with not seeing his sister. But yet, it's all "my fault" in my mother in laws eyes.

What would you do in this scenario? Would you just completely ignore it? Mother in law hasn't said anything to ME otherwise I would of course talk to her about it. Instead she talks negatively about me to others and I hear about it later.

Advice? What would you do?