Cryptocurrency enforcement in the United States could ease under President-elect Donald Trump’s upcoming administration. Regulatory priorities are likely to change, with a shift toward immigration enforcement.
Justice Department’s New Focus
During a legal conference in New York, senior government lawyers shared insights on how the Justice Department will allocate its resources. While financial fraud cases will still be pursued, immigration enforcement is expected to take priority. This was a key promise during Trump’s campaign.
Scott Hartman, co-chief of the securities and commodities task force at the U.S. Attorney’s Office in Manhattan, stated that fewer resources would go toward policing cryptocurrency crimes.
High-Profile Crypto Trials and Convictions
Hartman’s comments follow the office’s involvement in high-profile trials, such as the conviction of FTX founder Sam Bankman-Fried. “We brought significant fraud cases following the ‘crypto winter’ in 2022. With fewer prosecutors available, our regulatory partners will take the lead,” Hartman explained.
Possible Changes with Jay Clayton’s Nomination
Trump’s plan to nominate Jay Clayton, former SEC chair, as the new U.S. attorney in Manhattan may further shape the crypto regulatory landscape. Clayton, who served as SEC chair during Trump’s first term, took action on some crypto-related cases but was less aggressive compared to his successor, Gary Gensler.
Gensler’s leadership has seen a crackdown on major crypto platforms like Coinbase and Binance, but Trump has signaled intentions to remove Gensler. This could influence ongoing legal actions against these companies.
CFTC’s Role in Crypto Oversight
At the Commodity Futures Trading Commission (CFTC), cryptocurrency oversight has increased. Ian McGinley, the CFTC’s enforcement director, noted that nearly half of the commission’s cases last year involved crypto. However, McGinley cautioned that this trend might change under the new administration, focusing mainly on fraud or market manipulation cases.
U.S. Attorney’s Office and Financial Crime Enforcement
The U.S. Attorney’s Office in Manhattan remains a key player in handling financial crime cases. However, Steve Peikin, who led SEC enforcement during Clayton’s tenure, mentioned that the Justice Department may shift its priorities. He praised Clayton’s potential nomination but recognized the possibility of a change in focus.
Concerns Over Resource Cuts in Financial Fraud Cases
Hartman expressed concerns over further cuts to resources. “We have 16 prosecutors in the securities and commodities unit, and I hope there are no more cuts,” Hartman said.
Growing Criticism of the SEC’s Approach
The SEC faces criticism for its “regulation-by-enforcement” approach. Critics argue that the SEC has failed to establish clear rules for cryptocurrencies and has instead pursued legal actions against major players. In response, a coalition of seven U.S. states is challenging the SEC’s stance on crypto regulation.
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