Republican President-elect Donald Trump promised to ease enforcement of cryptocurrencies during his campaign. And that’s what will happen as Trump resets the policies of the Justice Department and regulatory agencies, current and former government lawyers said Friday at a conference in New York.
Crypto fraud cases won’t get a free pass, but they won’t be a priority either. Lawyers said the focus of government agencies and departments is likely to shift to areas such as immigration enforcement, another of Trump’s campaign promises.
Scott Hartman, co-head of the Securities and Commodities Task Force at the U.S. Attorney’s Office in Manhattan, said the office would devote fewer resources to 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 the Securities and Commodities Task Force currently has 16 prosecutors. “I don’t have a lot of people right now,” Hartman said. “I hope they don’t cut it any further,” he added.
Sullivan & Cromwell law firm partner Steve Pelkin, who led SEC enforcement during the previous Trump presidency between 2017 and 2021, said:
“There could be a substantial reallocation of resources to immigration enforcement. I’d be surprised if that didn’t happen.
Hartman and Pelkin’s comments come a day after Trump announced he would nominate Jay Claton, who served as chairman of the U.S. Securities and Exchange Commission (SEC) during the previous Trump administration, as the new U.S. Attorney in Manhattan. Under Clayton, the SEC had pursued some crypto cases, but the agency was less aggressive than under its current chairman, Gary Gensler.
Trump’s campaign promises included firing Gensler. The SEC is an independent agency, meaning Trump does not have the authority to fire Gensler. However, Gensler’s term ends in July 2025. Trump has not yet proposed a new SEC chair.
The SEC is currently embroiled in litigation with crypto companies like Coinbase and Binance. However, it is unclear whether these cases will continue in the event of a change in leadership.
It’s not just the prosecutors’ office that will readjust priorities. The Commodity Futures Trading Commission (CFTC) is expected to follow suit. The agency brought its first crypto case in 2015. Since then, crypto-related cases have begun to make up nearly half of its docket, Ian McGinley, CFTC director of enforcement, said during the conference. He added:
“I don’t know if this trend will necessarily continue…To the extent that there is fraud and manipulation in these markets, we will continue to be active.”
