New York anti-crypto stance softens as regulatory tide turns

Manhattan federal prosecutors will reduce their focus on crypto-related crimes following several major convictions, a senior prosecutor told Reuters today.

Scott Hartman, co-chief of the securities and commodities task force at the Southern District of New York (SDNY), made the statement a day after former SEC chair Jay Clayton was nominated to become the districts US attorney.

“You wont see as much crypto stuff coming out of at least the SDNY in the future,” Hartman said at a Practising Law Institute conference in New York.

The office will maintain oversight of crypto cases but has decreased the number of prosecutors handling such matters compared to the 2022 crypto market collapse period.

“We brought a lot of big cases in the wake of the crypto winter – there were a lot of important fraud cases to bring there – but we know our regulatory partners are very active in this space,” Hartman said, referring to the SEC and Commodity Futures Trading Commission.

Clayton, who led the SEC from 2017 to 2021 under President Trump, pursued some crypto-related enforcement actions but took a less aggressive approach to industry oversight than current SEC chair Gary Gensler.

Donald Trump announced a pro-crypto platform, aiming to establish a national Bitcoin reserve and oppose Central Bank Digital Currencies to position the US as a leader in global crypto.

In May, the SEC displayed a potential shift in crypto regulation by endorsing spot Ethereum ETFs, influenced by political pressures and crypto lobbying.