The U.S. Attorney's Office for the Southern District of New York (SDNY) plans to scale back cryptocurrency-related prosecutions. However, it will wrap up major cases such as the appeal of Sam Bankman-Fried.
The office will not completely ignore cryptocurrency cases, but it will reduce the resources and number of attorneys devoted to them.
Crypto Supporter Jay Clayton Nominated as SDNY U.S. Attorney
Donald Trump previewed this change by nominating crypto supporter Jay Clayton as the next U.S. Attorney for the SDNY on November 14.
According to a Reuters report, the U.S. Attorney's Office in Manhattan had deployed many attorneys to cryptocurrency cases since 2022. The fallout from the "crypto winter" has led to many major cases being tried in this district court.
"You won't see as many cryptocurrency-related cases in the SDNY going forward. We've handled a lot of big cases in the wake of the crypto winter, and we've needed to bring important fraud cases. But we know our regulatory partners are very active in this space." - Scott Hartman, co-chief of the SDNY's Securities and Commodities Task Force, said at a New York conference.
This cooling approach aligns with Donald Trump's plan to reduce the government's anti-crypto efforts. Yesterday, Trump nominated Jay Clayton as the U.S. Attorney for the SDNY. Since leaving the SEC in 2020, Clayton has strengthened his pro-crypto stance.
However, this cooling period will not happen all at once. First, Clayton cannot take office until Trump's inauguration in January. Additionally, the SDNY is still wrapping up several major cases, such as that of FTX co-founder Sam Bankman-Fried.
Bankman-Fried is currently appealing his fraud conviction, and prosecutors are still attempting to seize accounts related to bribery.
While Clayton may become Manhattan's top prosecutor and the "sheriff of Wall Street," this does not mean he can fully control the legal posture of the region. The current SDNY Attorney General is Letitia James, who is a crypto critic who has reaffirmed her commitment to cracking down on the crypto industry this year.
So far, Trump has not announced plans to replace her. However, he has the authority to do so. After Trump's electoral victory, James congratulated the new President-elect and expressed a willingness to cooperate if possible.
Overall, this situation could be similar to the lawsuit by 18 U.S. states against the SEC. This lawsuit suggests deep regulatory changes for the U.S. cryptocurrency landscape.
