A prosecutor from the U.S. Attorney’s Office for the Southern District of New York (SDNY) has indicated a shift in focus away from pursuing cryptocurrency-related criminal cases. During the Practicing Law Institute’s 56th Annual Institute on Securities Regulation on Nov. 15, Scott Hartman, co-chief of the Securities and Commodities Fraud Task Force at SDNY, suggested that the office might devote fewer resources to such cases moving forward.
Hartman hinted that many high-profile criminal cases, including those against former FTX CEO Sam Bankman-Fried, were largely a response to the turbulent crypto market conditions of 2022. “We brought a lot of big cases in the wake of the crypto winter,” Hartman said. He acknowledged that while there were important fraud cases to address, much of the ongoing regulatory work would continue to be handled by other agencies.
The SDNY currently has several pending crypto-related cases, including one against former Celsius CEO Alex Mashinsky, whose trial is scheduled for January 2025. Prosecutors are also preparing for the sentencing of Gary Wang, another defendant from the FTX criminal case, on Nov. 20 in New York.
Hartman’s remarks came just one day after President-elect Donald Trump announced his intention to nominate Jay Clayton, a former SEC Chair, to serve as the U.S. Attorney for SDNY. This nomination is part of a broader move by Trump to appoint key figures to his administration before his inauguration on Jan. 20. It remains unclear if Hartman’s comments were influenced by this potential shift in leadership.
At the same conference, SEC Chair Gary Gensler reaffirmed his commitment to regulating digital assets through enforcement. Whether Gensler intends to resign before the inauguration or plans to continue until the end of his term in 2026 is still uncertain.