NY prosecutor suggests office will scale back crypto cases

A prosecutor with the United States Attorney’s Office for the Southern District of New York (SDNY) has suggested that authorities are devoting fewer resources to bringing cases involving cryptocurrency-related crimes.

Speaking at the Practicing Law Institute’s 56th Annual Institute on Securities Regulation on Nov. 15, Scott Hartman reportedly said there would not be “as much crypto stuff coming out of at least the SDNY in the future.” Hartman, the co-chief of the Securities and Commodities Fraud Task Force at SDNY, hinted that many of its criminal cases against high-profile executives like former FTX CEO Sam Bankman-Fried were filed in response to the crypto market downturn of 2022.

“We brought a lot of big cases in the wake of the crypto winter,” said Hartman. “There were a lot of important fraud cases to bring there, but we know our regulatory partners are very active in this space.”

Prosecutors in New York’s Southern District have several pending cases involving crypto firms or their executives, including former Celsius CEO Alex Mashinsky. The Securities and Exchange Commission has also filed lawsuits against Coinbase and Ripple Labs in the region.

Hartman’s comments came less than 24 hours after President-elect Donald Trump said he intended to nominate former SEC Chair Jay Clayton to serve as US attorney for SDNY.

SDNY prosecutors are scheduled to go to trial against Mashinsky in January 2025. Gary Wang, one of the last defendants in the FTX criminal case, is also expected to be sentenced in New York on Nov. 20.

Related: Bitfinex hacker sentenced to 5 years in prison

At the same conference on Nov. 14, SEC Chair Gary Gensler reiterated many of his positions on regulating digital assets through enforcement actions. It’s unclear whether Gensler intends to resign before Trump’s inauguration scheduled for Jan. 20 or whether the president-elect had the authority to remove him from the SEC. His term officially ends in 2026.

Trump naming potential staff, Cabinet members

Whether Hartman’s comments were related to Clayton’s potential nomination was unclear. Trump said he would attempt to push through all picks for his administration through recess appointments — actions that many experts suggested would violate US constitutional intent.

Normally, a US attorney must be confirmed by a majority in the Senate. Damian Williams, the current US Attorney for SDNY, was nominated by President Joe Biden and confirmed by the Senate in 2021.

Magazine: US enforcement agencies are turning up the heat on crypto-related crime