The United States Attorney’s Office for the Southern District of New York (SDNY) will reduce its focus on cryptocurrency crimes following a series of high-profile convictions, including that of FTX founder Sam Bankman-Fried.
Scott Hartman, co-chair of the securities and commodities task force, announced the change today, citing reduced resources devoted to crypto cases.
“You’re not going to see a lot of crypto work coming out of SDNY, at least not in the future,” Hartman said at the Practising Law Institute conference in New York. While the office will continue to pursue crypto cases, he noted that fewer prosecutors are working on them now than after the “crypto winter” of 2022, when the collapse in digital asset prices exposed widespread fraud.
“We have had a lot of big cases filed in the wake of the crypto winter,” Hartman added, citing the office’s significant role in addressing fraud during the crisis. He noted that regulators such as the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) remain active in overseeing the industry.
The announcement came a day after President-elect Donald Trump appointed former SEC Chairman Jay Clayton as U.S. Attorney for SDNY, replacing Biden appointee Damian Williams.
Clayton, who served as SEC chairman from 2017 to 2021 during the Trump administration, took a relatively restrained approach to regulating the nascent cryptocurrency sector during his tenure. In contrast, current SEC Chairman Gary Gensler has taken a more aggressive stance, prompting backlash from many crypto executives who supported Trump’s campaign.
The SEC under Gensler has taken numerous enforcement actions against crypto companies, a sharp departure from the Clayton era, when the industry was smaller and less scrutinized.
*This is not investment advice.