Emily Walker
The US Attorney’s Office in Manhattan is adjusting its strategy towards enforcing cryptocurrency crimes, deciding to devote “fewer resources” in this domain after achieving several high-profile convictions, including that of Sam Bankman-Fried, the founder of FTX.
Southern District of New York to Reduce Crypto Cases
Scott Hartman, who co-leads the securities and commodities task force at the Southern District of New York (SDNY), shared this update at a conference organized by the Practicing Law Institute in New York.
Hartman explained that even though the office will still handle cryptocurrency cases, the number of prosecutors focused on these matters has reduced since the downturn in digital asset values in 2022.
He assured that while crypto prosecutions are not being entirely abandoned, there will be a significant decrease in the number of cases moving forward. “You won’t see as much crypto stuff coming out of at least the SDNY in the future,” he remarked.
Jay Clayton Appointed as US Attorney
This decision coincides with the appointment of Jay Clayton, the former chair of the US Securities and Exchange Commission (SEC), as the new US attorney for the Southern District of New York by President-elect Donald Trump.
Clayton held office during Trump’s first term from 2017 to 2021, where he engaged in some cryptocurrency-related cases but with less fervor compared to the current SEC chair, Gary Gensler, who is known for a more stringent regulatory approach.
Trump’s views on cryptocurrencies during his first term were notably different from his current campaign rhetoric. At one point, he had voiced skepticism about digital currencies, particularly criticizing Bitcoin (BTC) as a “scam” and labeling it as “highly volatile and based on thin air.”
As President-elect, he has vowed to make substantial changes regarding cryptocurrency policy, planning to end the “war on crypto” and proposing to designate Bitcoin as a strategic reserve asset for the United States to help mitigate the country’s $36 trillion debt.
Hartman mentioned the SDNY’s commitment to tackling significant fraud cases during the challenging period for crypto in 2021 but emphasized the oversight role played by other regulatory bodies like the SEC and the Commodity Futures Trading Commission (CFTC).
President Trump also signaled potential shifts in SEC leadership, asserting his plan to dismiss Gary Gensler on the first day of his administration commencing January 20.
Overall, there is growing optimism among digital asset investors as the upcoming administration may facilitate greater adoption and growth in digital assets, with the promise of fresh regulatory frameworks.
Featured image from DALL-E, chart from TradingView.com