Manhattan US Attorney’s Office to Scale Back Crypto Prosecutions  

• Manhattan US Attorney’s Office to reduce resources for crypto crime investigations.
• The change follows major victories, including Sam Bankman-Fried’s conviction.
• Ex-SEC Chair Jay Clayton poised to lead office under new Trump administration.

After securing several significant legal victories, the Manhattan U.S. Attorney’s Office is preparing to reduce its focus on cryptocurrency-related crimes.

This shift was confirmed by Scott Hartman, co-chief of the securities and commodities task force at the Southern District of New York (SDNY), during a recent conference in New York City.

Hartman indicated that the office plans to allocate fewer resources to prosecuting crypto fraud cases, citing the successful conviction of Sam Bankman-Fried, founder of the collapsed crypto exchange FTX, as one of the critical factors behind this decision. 

Hartman emphasized that the SDNY’s focus had intensified during the aftermath of the 2022 “crypto winter,” which exposed widespread fraudulent activities within the digital asset space. However, with these major cases resolved, the office is now realigning its priorities.

The change in strategy coincides with an expected leadership shift in the office. Former SEC Chair Jay Clayton is reportedly set to replace Damian Williams as Manhattan U.S. Attorney under the incoming Trump administration. 

Clayton, who led the SEC from 2017 to 2021, was known for adopting a less aggressive stance toward the crypto industry compared to the current SEC Chair, Gary Gensler. This change may signal a recalibration in the approach toward crypto enforcement under new leadership.

Despite the decision to reduce its focus on crypto prosecutions, the Manhattan U.S. Attorney’s Office will continue to collaborate closely with regulatory bodies such as the SEC and the Commodity Futures Trading Commission (CFTC). 

Hartman noted that these agencies would still play a vital role in maintaining oversight over the sector to prevent unlawful activities. 

The SDNY’s pivot reflects a broader strategy to tackle a range of legal priorities beyond the crypto sphere, especially as other regulatory agencies remain vigilant in their enforcement efforts.