Manhattan US Attorney to scale back crypto cases, prosecutor says

By Luc Cohen

NEW YORK (Reuters) – The U.S. Attorney’s Office in Manhattan will devote fewer resources to policing cryptocurrency crimes after securing several major convictions, including that of FTX founder Sam Bankman-Fried, a senior prosecutor said on Friday.

Scott Hartman, co-chief of the securities and commodities task force at the Southern District of New York, gave his assessment one day after President-elect Donald Trump’s former U.S. Securities and Exchange Commission chair Jay Clayton to become the U.S. attorney there.

Hartman said the office would not ignore crypto cases, but has fewer prosecutors working on them than when digital asset prices collapsed in 2022, a period known as “crypto winter.”

“You won’t see as much crypto stuff coming out of at least the SDNY in the future,” Hartman said at a conference hosted by the Practising Law Institute in New York.

“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 agencies such as the SEC and the Commodity Futures Trading Commission.

Clayton led the SEC during Trump’s first term as president from 2017 to 2021. He would replace Damian Williams, an appointee of President Joe Biden, as U.S. attorney.

While at the SEC, Clayton pursued some crypto-related cases, but was less aggressive at policing the industry, which was smaller at the time, than current SEC chair Gary Gensler.

Many cryptocurrency executives supported Trump’s campaign, believing Gensler’s crackdown went too far.

(Reporting by Luc Cohen in New York; editing by Jonathan Oatis)