Federal prosecutors to downsize crypto lawsuits

Relief for cryptocurrency businesses comes as prosecutors signal plans to ease crackdowns following President Donald Trump’s re-election.

Federal prosecutors from the U.S. Attorney’s Office in Manhattan have indicated they will reduce cases against cryptocurrency companies after securing key convictions, according to Reuters.

The shift follows high-profile victories, including the conviction of FTX founder Sam Bankman-Fried and record deals with Binance and Terraform Labs since the crypto crash in 2022.

The announcement came shortly after President-elect Donald Trump appointed former Securities and Exchange Commission chairman Jay Clayton as the new U.S. attorney for the Southern District of New York. This jurisdiction has handled many important cases related to the blockchain asset.

The early changes under the Trump administration point to a potential policy shift that industry leaders have long sought. Companies like Coinbase and Ripple (XRP) have consistently advocated for clearer compliance guidelines and digital asset rules from agencies like the Securities and Exchange Commission.

The SEC itself may face leadership changes, with Trump proposing new appointments and current chairman Gary Gensler hinting at early retirement.

Yet the U.S. crackdown on digital assets extends far beyond the SEC’s regulatory arm. Industry commentators like Nic Carter have pointed out that the entire government colluded to debank the crypto business and block digital assets from financial services.

Carter’s “Operation Pinch Point 2.0” suggests that monitors such as the Treasury Department and the Comptroller of the Currency will also need new perspectives and senior staff.

When Carter visited Washington this week to discuss policy, he apparently left with a sense of hope. His comments on X implied growing bipartisan support for stablecoin tokens.

Leaving D.C. after two days of meetings with permission from Congress and the Fed @DigitalOda. My conclusions:

– Stablecoin bill is priority, but probably won’t happen in lame duck session
– huge bipartisan desire to work on crypto. Crypto efforts in this election did not work… pic.twitter.com/PtpNeBzSOt

— nic carter (@nic__carter) November 13, 2024

Similarly, Polygon’s chief legal and policy officer, Rebecca Rettig, noted that progress is being made toward favorable regulations in the U.S., potentially outpacing regulations in Europe. Rettig expects stablecoin regulations, backed by broad congressional consensus, to be in place by 2025.

In terms of timing, we can expect to see stablecoin regulation in 2025. There is already significant consensus within Congress on how to approach this, and only a few adjustments are likely needed. President Trump has discussed establishing a crypto council that would bring together industry leaders, law enforcement and policy experts to provide guidance on the best path forward for crypto regulation. From this council we could see legislation shaping market structure, similar to the EU’s MiCA framework for centralized organisations, or possibly rule-making within regulatory bodies, or even a mix of both approaches.

Rebecca Rettig, Polygon chief legal and policy officer