New York prosecutors are making changes to their approach to crypto enforcement as leadership transitions within the office. The US Attorney’s Office in Manhattan will be scaling back its focus on crypto crimes, with fewer prosecutors dedicated to these cases compared to the “crypto winter” period in 2022.
Scott Hartman, co-chief of the securities and commodities task force for the Southern District of New York (SDNY), confirmed this shift during a legal conference in New York. While the SDNY remains committed to prosecuting fraud in the blockchain sector, they will be reducing the number of prosecutors working on crypto cases.
This decision comes after a series of high-profile convictions, including the recent case against FTX founder Sam Bankman-Fried. The announcement of the change in focus coincides with broader changes at the Manhattan US Attorney’s Office, as Jay Clayton, former SEC chair under President-elect Donald Trump, has been nominated to replace Damian Williams as U.S. Attorney.
Clayton’s approach to crypto regulation during his time at the SEC was more restrained compared to the current SEC chair, Gary Gensler, who has taken a more aggressive stance on enforcement actions within the industry. This shift in leadership and focus on crypto enforcement could indicate a recalibration of priorities as the industry stabilizes after a period of turmoil.
While the SDNY will continue to prosecute fraud cases in the blockchain sector, the reduction in resources allocated to crypto cases reflects a changing landscape in the regulatory environment. With the potential for a lighter regulatory touch under the new administration, many in the crypto sector are watching closely to see how enforcement priorities will evolve in the coming months.
