The U.S. Attorney’s Office for the Southern District of New York (SDNY) plans to reduce its focus on cryptocurrency-related crimes following a string of high-profile convictions, including that of FTX founder Sam Bankman-Fried. This announcement comes just a day after former SEC Chairman Jay Clayton was nominated by Donald Trump to serve as the new U.S. attorney for the district.
Scott Hartman, co-chief of the SDNY’s securities and commodities task force, revealed the shift in priorities at a Practising Law Institute conference in New York on Friday. He explained that while the office won’t entirely abandon cryptocurrency cases, the number of prosecutors dedicated to them will decrease from the peak during the 2022 “crypto winter” market crash.
“You won’t see as much crypto stuff coming out of at least the SDNY in the future,” Hartman stated. He attributed the change to the successful prosecution of significant fraud cases stemming from the market downturn. Hartman also highlighted the active role of regulatory partners like the SEC and the Commodity Futures Trading Commission in overseeing the cryptocurrency space. “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 – but we know our regulatory partners are very active in this space,” he added.
The timing of this announcement coincides with the nomination of Jay Clayton, who served as SEC Chairman under President Trump from 2017 to 2021, to replace current U.S. Attorney Damian Williams, a Biden appointee. Clayton’s tenure at the SEC saw some crypto-related enforcement actions, but his approach was perceived as less aggressive than that of current SEC Chair Gary Gensler, particularly given the smaller size of the industry at the time.
Many cryptocurrency executives supported Trump’s campaign, expressing concerns that Gensler’s regulatory actions were excessive.
