The US Attorney’s Office in Manhattan is reportedly shifting its resources away from crypto crime enforcement. This change comes after a series of significant convictions, notably including that of FTX founder Sam Bankman-Fried. This strategic pivot indicates a potential shift in how federal authorities prioritize cryptocurrency-related legal actions.
Southern District of New York to Scale Back Crypto Prosecutions
Scott Hartman, who serves as the co-chief of the securities and commodities task force at the Southern District of New York (SDNY), shared insights into this development at a conference organized by the Practicing Law Institute in New York. Hartman pointed out that while the office will continue to tackle cryptocurrency cases, the number of prosecutors assigned to these matters has decreased since the digital asset market downturn in 2022.
Despite this change, the prosecutor clarified that the SDNY is not completely stepping away from crypto-related prosecutions. However, there will be a discernible reduction in the volume of such cases. “You won’t see as much crypto stuff coming out of at least the SDNY in the future,” Hartman remarked. This statement suggests a recalibration of priorities within the office, likely influenced by both resource allocation and the evolving landscape of digital assets.
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Former SEC Chair Clayton Takes Office as US Attorney
This decision aligns closely with the recent appointment of Jay Clayton as the new US Attorney for the Southern District of New York by President-elect Donald Trump. Clayton, who previously served as the chair of the US Securities and Exchange Commission (SEC) from 2017 to 2021, had a history of addressing cryptocurrency-related cases, though with less rigor than the current SEC chair, Gary Gensler. Gensler has adopted a more assertive approach to regulating the industry.
During his previous tenure, Trump’s views on digital assets differed significantly from his current presidential campaign, which led to his election victory on November 5. In the past, Trump had been vocal about his skepticism toward cryptocurrencies, particularly Bitcoin (BTC), which he described as a “scam” and criticized for being “highly volatile and based on thin air.”
As President-elect, Trump has pledged to overhaul the nation’s approach to cryptocurrencies. His vision includes ending the current “war on crypto” and proposing initiatives such as designating Bitcoin as a strategic reserve asset for the United States. This move is part of a broader strategy to address the country’s $36 trillion debt.
Despite the shift in resources, Scott Hartman acknowledged that the SDNY has actively pursued significant fraud cases during the 2021 crypto winter. He further highlighted that other regulatory bodies, such as the SEC and the Commodity Futures Trading Commission (CFTC), continue to play a crucial role in overseeing the sector.
In line with these developments, President Trump has suggested possible changes in SEC leadership, expressing his intention to dismiss Gary Gensler on the first day of his new administration, which begins on January 20. This leadership change could herald a new era in how the SEC approaches cryptocurrency regulation.
Optimism is growing among investors in the digital asset ecosystem, as the incoming administration is expected to facilitate further adoption and growth of digital assets. The promise of new regulatory frameworks under the new administration could serve as a catalyst for innovation and expansion within the crypto industry.
The impending changes in federal oversight and policy direction offer a glimpse into the future of the digital asset market. With a total crypto market cap valuation reaching $2.9 trillion, the landscape is poised for transformation. Investors and industry stakeholders alike are watching closely to see how these developments will unfold and shape the future of cryptocurrencies in the United States.
