The S.E.C. Eased Crypto Enforcement After Trump Returned to Office, New York Times Investigation Finds
An extensive investigation by The New York Times has revealed a significant shift in the U.S. Securities and Exchange Commission’s (S.E.C.) approach to the cryptocurrency industry following the return of Donald J. Trump to the White House for his second presidential term. The probe, which analyzed thousands of government documents and court records alongside interviews with more than two dozen current and former officials, uncovered a marked pullback in enforcement actions targeting crypto firms—a move that benefited the industry, including companies with ties to the Trump family.
A Sharp Turn in Enforcement Strategy
During Trump’s first term and the subsequent Biden administration, the S.E.C. had been notably aggressive in pursuing lawsuits against cryptocurrency companies, aiming to regulate the fast-growing but often opaque market. For example, the agency brought approximately 50 cases against crypto firms in Trump’s initial administration and 105 during Biden’s tenure.
However, the investigation found that during Trump’s second term, the S.E.C. filed no new crypto cases and, quite remarkably, retreated on a substantial portion of existing lawsuits. The agency eased enforcement in over 60% of open crypto cases by either pausing litigation, negotiating softer penalties, or outright dismissing charges.
This reversal of policy was highlighted by a number of high-profile legal actions that were halted or dismissed, actions that investigators described as unprecedented in the agency’s history for a single industry.
Notable Cases and Outcomes
One of the standout cases involved the Winklevoss twins’ cryptocurrency venture, Gemini. Prior to Trump’s return to office, Gemini was facing a stringent federal lawsuit from the S.E.C., but after the administration change, the commission moved to freeze the case. The S.E.C. similarly dropped its lawsuit against Binance, the world’s largest crypto exchange, and sought to reduce penalties in its drawn-out legal battle with Ripple Labs.
Across all these cases, the agency dismissed seven crypto lawsuits entirely—an unusually high dismissal rate. Meanwhile, it froze or proposed favorable settlements in seven other cases, reflecting a broad reluctance to continue aggressive enforcement under the new administration.
Connections to the Trump Family
The investigation highlighted that several firms benefiting from the S.E.C.’s softened stance had direct or indirect ties to Donald Trump or his family. For example:
- The Gemini exchange, founded by the Winklevoss twins, received investment from Winklevoss Capital, which has connections to Trump allies.
- American Bitcoin, a bitcoin mining company, donated $2 million to a pro-Trump fundraising committee.
- Some firms had executives or donors linked to the Trump family or the White House.
In total, five of the dismissed or eased cases involved companies with known ties to Trump or his family, prompting scrutiny over whether these connections influenced enforcement decisions.
Statistical Insights
- Prior to Trump’s second term, approximately 33% of crypto cases were dropped, compared to just 4% of other cases.
- During his second term, zero new crypto cases were filed.
- Of the crypto cases ongoing at the time of Trump’s return, around 33% were dropped or softened, whereas only 4% of non-crypto cases saw similar outcomes.
Industry Impact
The S.E.C.’s pullback was widely viewed as a victory for the cryptocurrency industry, which had frequently criticized the agency’s earlier clampdowns as overly harsh or unclear. The softer regulatory approach during Trump’s second term allowed several crypto companies to avoid potentially devastating legal consequences and provided temporary relief to a sector grappling with regulatory uncertainty.
Looking Ahead
The report underscores a broader theme of how political shifts and personal connections can influence federal regulatory enforcement. The S.E.C.’s change of course on crypto during Trump’s second administration stands as a case study in the interplay between politics and financial regulation.
As of this writing, the agency has resumed a more assertive stance under subsequent administrations, though the episode serves as a reminder of the fragile balance regulators must maintain between innovating markets and protecting investors.
The New York Times investigative team—Ben Protess, Andrea Fuller, Sharon LaFraniere, and Seamus Hughes—compiled this analysis based on a review of government documents, court records, and interviews with key officials. Graphics supporting the story were created by Elena Shao.
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