2024-11-18 05:00 |
Republican President-elect Donald Trump promised to ease up crypto enforcement during his campaign. And that’s what’s going to happen as Trump resets policy at the Justice Department and regulatory agencies, current and former government lawyers said at a conference in New York on Friday.
Crypto fraud cases won’t get a free pass, but they would no longer be a priority either. The lawyers said that the focus of the government agencies and departments is likely to shift to areas such as immigration law enforcement—another one of Trump’s campaign promises.
Scott Hartman, the co-chief of the securities and commodities task force at the U.S. Attorney’s Office in Manhattan, said that the office will dedicate fewer resources toward crypto-related crimes. This means fewer prosecutors will be working on crypto cases than in 2022 when the crypto industry collapsed and triggered a ‘crypto winter.’
Hartman said that the securities and commodities task force currently has 16 prosecutors. “I don’t have a ton of people right now,” Hartman said. “I hope they don’t trim it more,” he added.
Partner at law firm Sullivan & Cromwell, Steve Pelkin, who led SEC enforcement during the previous Trump presidency between 2017 and 2021, said:
“There could be a reallocation of substantial resources to immigration enforcement. I would be surprised if that doesn’t happen.”
Hartman and Pelkin’s comments come a day after Trump said that he would nominate Jay Claton, who served as the U.S. Securities and Exchange Commission (SEC) chair under the previous Trump administration, to be the new U.S. attorney in Manhattan. Under Clayton, the SEC had pursued a few crypto-cases, but the agency was less aggressive than under the leadership of the current chair, Gary Gensler.
Trump’s campaign promises included firing Gensler. The SEC is an independent agency, which means Trump does not have the authority to fire Gensler. However, Gensler’s term ends in July 2025. Trump is yet to propose a new SEC chair.
The SEC is currently embroiled in litigation with crypto firms like Coinbase and Binance. However, it is uncertain if the cases would continue if there is a change in leadership.
It is not just the prosecutors’ office that will realign priorities. The Commodity Futures Trading Commission (CFTC) is likely to follow suit. The agency brought its first crypto case in 2015. Since then, crypto-related cases have started accounting for nearly half of its docket, Ian McGinley, CFTC enforcement director, said at the conference. He added:
“I don’t know if that trend will necessarily continue…To the extent there’s fraud and manipulation in those markets, we’ll continue to be active.”
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