The US Attorney’s Office in Manhattan is reportedly shifting its approach to crypto crime enforcement, allocating “fewer resources” to this area following a series of significant convictions, including that of FTX founder Sam Bankman-Fried.
Southern District Of New York To Scale Back Crypto Prosecutions
Scott Hartman, co-chief of the securities and commodities task force at the Southern District of New York (SDNY), announced this at a conference hosted by the Practicing Law Institute in New York.
Hartman noted that while the office will continue to address cryptocurrency cases, the number of prosecutors dedicated to these issues has diminished since the collapse of digital asset prices in 2022.
The prosecutor emphasized that the SDNY will not completely abandon crypto-related prosecutions but indicated a notable decline in cases moving forward. “You won’t see as much crypto stuff coming out of at least the SDNY in the future,” he stated.
Former SEC Chair Clayton Takes Office As US Attorney
The decision comes shortly after President-elect Donald Trump appointed 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.
Clayton held his position during Trump’s first term, from 2017 to 2021, and was known for pursuing some cryptocurrency-related cases, albeit with less intensity than the current SEC chair, Gary Gensler, who has taken a more aggressive stance on regulating the industry.
At the time, Trump’s perspective on the industry was also significantly different from the views he expressed during his current presidential campaign leading up to his election on November 5.
Previously, Trump had expressed skepticism toward digital assets, particularly targeting Bitcoin (BTC), which he labeled a “scam” and criticized for being “highly volatile and based on thin air.”
The President-elect has committed to implementing substantial changes in the country’s approach to crypto. He has promised to end the current “war on crypto” and proposed initiatives such as designating Bitcoin as a strategic reserve asset for the US to reduce the nation’s $36 trillion debt.
Nevertheless, Scott Hartman acknowledged that the SDNY has actively pursued significant fraud cases during the 2021 crypto winter. Yet, he emphasized that other regulatory agencies, such as the SEC and the Commodity Futures Trading Commission (CFTC), oversee the sector.
President Trump has hinted at potential changes in SEC leadership, stating his intention to fire the agency’s Gary Gensler, on the first day of his new administration, which begins on January 20.
Overall, there is optimism among investors in the digital asset ecosystem as the incoming administration is poised to be a catalyst for further adoption and growth of digital assets, with the promise of new regulatory frameworks.
Featured image from DALL-E, chart from TradingView.com