The cryptocurrency market will likely  face less regulation in the future, as President-elect Donald Trump prepares to change policies at the Justice Department and other regulatory agencies. According to senior government lawyers, the new administration is likely to focus less on strict rules for cryptocurrencies.

However, these lawyers clarified that the government would still take action against financial fraud cases, but the Justice Department would shift its priorities. The new administration is expected to focus more on other areas, such as enforcing immigration laws, which was a key issue in Trump’s campaign.

https://twitter.com/RoundtableSpace/status/1857673521448759810

So, this change mean that cryptocurrency businesses and investors might experience fewer regulations and stricter enforcement. It may also lead to more freedom in the market, allowing for greater growth and innovation. However, there will still be some focus on stopping financial fraud, but overall, the government’s attention will be redirected to other priorities under Trump’s leadership.

U.S. Attorney’s Office Reduces Focus on Cryptocurrency Crimes

FTX founder Sam Bankman-Fried was one of the major figures convicted in cryptocurrency-related crimes. Following this, the U.S. Attorney’s Office in Manhattan plans to focus less on policing cryptocurrency crimes. Scott Hartman, the co-chief of the office’s securities and commodities task force, explained that the office would still handle crypto cases but with fewer resources than before.

Hartman mentioned at a conference that while the office won’t completely ignore cryptocurrency cases, there will be fewer prosecutors working on them compared to when the value of digital assets dropped in 2022, a time called “crypto winter.” This was a period when many crypto-related fraud cases emerged, and the office worked hard to bring them to court.

JUST IN: 🇺🇸

Manhattan US Attorney's Office to reduce its prosecutions of crypto companies. pic.twitter.com/exZmuBzxjq

— Radar🚨 (@RadarHits) November 15, 2024

Hartman also pointed out that other regulatory bodies are very active in cryptocurrency enforcement. As a result, the U.S. Attorney’s Office is reducing its focus on crypto crimes, knowing that these agencies will continue to handle the bulk of enforcement. While crypto crimes will still be addressed, there will be less attention from the Manhattan office compared to the past.

Therefore, the reduced focus on cryptocurrency crimes by the U.S. Attorney’s Office may lead to less regulatory pressure, potentially boosting investor confidence and market growth. However, increased responsibility on other agencies could result in ongoing scrutiny for crypto businesses.

Trump’s Nomination of Jay Clayton Signals Potential Shift in U.S. Crypto Regulation

Donald Trump recently announced that he would nominate former U.S. Securities and Exchange Commission (SEC) chair Jay Clayton to become the new U.S. attorney in Manhattan. Clayton led the SEC during Trump’s first term from 2017 to 2021. He would replace Damian Williams, who was appointed by President Joe Biden. While Clayton did handle some crypto-related cases during his time at the SEC, he was less aggressive in regulating the industry compared to the current SEC chair, Gary Gensler. Gensler has been more focused on cracking down on large crypto companies, like Coinbase and Binance, for failing to register with the agency.

Jay Clayton is now picked by Trump as U.S. Attorney for the Southern District of New York 👀

This whole case must have been a show holy fu.. pic.twitter.com/YTi8Ziq2uX

— Jim_Knox (@JimKnox123) November 14, 2024

Trump has said he plans to fire Gensler, though it is unclear whether the ongoing legal battles against these crypto firms will continue under his administration. Many cryptocurrency executives supported Trump, believing that Gensler’s approach was too harsh on the industry. Trump’s appointment of Clayton could signal a shift in the U.S. government’s stance on cryptocurrency regulation.

Meanwhile, the Commodity Futures Trading Commission (CFTC), which regulates agricultural markets, has been involved in overseeing the crypto market since 2015. Last year, digital assets accounted for almost half of its cases. CFTC enforcement director Ian McGinley stated that while they will continue to address fraud and market manipulation, it’s uncertain whether the increasing number of crypto cases will continue in the future. The CFTC is expected to stay active in regulating the industry, especially where fraud is concerned.

The potential shift in U.S. crypto regulation, with Jay Clayton’s appointment and a less aggressive stance from the SEC, may boost market confidence. However, ongoing scrutiny by the CFTC and uncertainty around legal battles could create mixed conditions for investors.

U.S. Attorney’s Office in Manhattan Faces Potential Shift in Focus, Impacting Financial Crimes

The U.S. Attorney’s Office in Manhattan is known for handling important financial crime cases, including those against big Wall Street firms and their executives. They also deal with corruption cases involving well-known politicians. While the office has worked on some high-profile cryptocurrency cases, it also focuses on traditional financial crimes.

Steve Peikin, who led SEC enforcement under Chairman Clayton, praised Clayton as a good choice to lead the office. However, he mentioned that the Justice Department’s priorities could shift. Peikin suggested that resources might be redirected towards immigration enforcement, and he would be surprised if this didn’t happen.

Hartman, who works in the securities and commodities unit, agreed that the president can set priorities. Still, he emphasized that their work against financial fraud is not influenced by politics. Hartman also pointed out that the unit is small, with just 16 prosecutors, and he hopes the department doesn’t reduce the team further.