Relief for cryptocurrency businesses is emerging as prosecutors signal plans to scale back crackdowns following President Donald Trump’s re-election.
Federal prosecutors from the U.S. Attorney’s Office in Manhattan indicated they will reduce litigation against cryptocurrency firms after securing key convictions, according to Reuters.
TThe shift follows high-profile victories, including the conviction of FTX founder Sam Bankman-Fried and record settlements with Binance and Terraform Labs since the 2022 crypto crash.
The announcement came shortly after President-elect Donald Trump appointed former Securities and Exchange Commission chair Jay Clayton as the new U.S. attorney for the Southern District of New York. This jurisdiction has handled many significant blockchain asset-related cases.
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The initial changes under Trump’s administration suggest a potential policy shift long sought by industry leaders. Companies like Coinbase and Ripple (XRP) have consistently advocated for clearer compliance guidelines and digital asset rules from agencies like the Securities and Exchange Commission.
The SEC itself could face leadership changes, as Trump has suggested new appointments and current chair Gary Gensler has hinted at an early retirement.
Still, the U.S. digital asset crackdown stretches far beyond the SEC’s regulatory arm. Industry commentators like Nic Carter have pointed to a whole-of-government collusion to de-bank crypto business and block digital assets from financial services.
Carter’s so-called “Operation Choke Point 2.0” suggests watchdogs like the Treasury Department and Currency Comptroller would also require fresh perspectives and top personnel.
When Carter visited Washington this week to discuss policy, he apparently left with a sense of hope. His comments on X alluded to growing bi-partisan support for stablecoin tokens.
Leaving DC after two days of meetings with Congress and the Fed courtesy of @DigitalChamber. My takeaways:– stablecoin bill is the priority, but probably won’t happen in the lame duck session – huge bipartisan desire to work on crypto. Crypto efforts in this election did not… pic.twitter.com/PtpNeBzSOt
— nic carter (@nic__carter) November 13, 2024
Similarly, Polygon’s chief legal and policy officer Rebecca Rettig noted progress toward favorable U.S. regulations, potentially surpassing those in Europe. Rettig expects stablecoin regulations to materialize by 2025, backed by broad congressional consensus.
In terms of timing, we can expect to see stablecoin regulation in 2025. There’s already substantial consensus within Congress on how to approach this, with only a few adjustments likely needed. President Trump has discussed establishing a crypto council that would bring together industry leaders, law enforcement, and policy experts to provide guidance on the best path forward for crypto regulation. From this council, we may see legislation that shapes market structure—similar to the EU’s MiCA framework for centralized entities—or possibly rulemaking within regulatory agencies, or even a blend of both approaches.
Rebecca Rettig, Polygon chief legal and policy officer
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