Manhattan Federal Prosecutors to Scale Back Crypto Cases Under Trump Administration
Federal prosecutors in Manhattan are planning to reduce their focus on cryptocurrency-related cases, marking a significant shift in enforcement priorities following Donald Trump’s presidential election victory, Reuters reported on Friday.
Scott Hartman, co-chief of the securities and commodities task force at the U.S. Attorney’s Office for the Southern District of New York (SDNY), revealed that fewer resources would be allocated to cryptocurrency enforcement compared to the 2022 “crypto winter” period, when the office secured several major convictions, including that of FTX founder Sam Bankman-Fried.
“We brought a lot of big cases in the wake of the crypto winter – there were a lot of important fraud cases to bring there,” Hartman said at a Practising Law Institute conference in New York. “But we know our regulatory partners are very active in this space, and we don’t have a lot of people.”
The announcement comes just one day after President-elect Trump named former Securities and Exchange Commission (SEC) chair Jay Clayton as his nominee for U.S. Attorney in Manhattan. Clayton, who led the SEC from 2017 to 2021, was known for a less aggressive approach toward cryptocurrency regulation during his tenure compared to current SEC chair Gary Gensler.
While Hartman emphasized that the office would not completely ignore cryptocurrency cases, he noted that the 16-prosecutor securities and commodities unit has limited resources. The shift suggests a broader realignment of priorities under the incoming Trump administration, with sources indicating a potential focus on immigration enforcement.
The SDNY’s cryptocurrency enforcement has been particularly impactful in recent years, handling high-profile cases including those against former Celsius CEO Alex Mashinsky and various executives from the collapsed FTX exchange. The office’s changing stance could signal a wider shift in the regulatory landscape for digital assets, as Trump has already announced plans to replace current SEC chair Gary Gensler, who has pursued aggressive enforcement actions against major cryptocurrency firms like Coinbase and Binance.
