Manhattan prosecutors soften crypto enforcement after high-profile wins

Manhattan prosecutors are easing up on crypto crime enforcement. After nailing big wins, like the conviction of FTX’s Sam Bankman-Fried, the U.S. Attorney’s Office in Manhattan is shifting its priorities.

Scott Hartman, co-chief of the Southern District of New York’s securities and commodities task force, confirmed the decision during a legal conference.

Hartman said crypto cases aren’t going away entirely, but fewer prosecutors are assigned to them now compared to the chaos of 2022’s “crypto winter,” when digital asset prices tanked. Back then, fraud cases were everywhere.

“You won’t see as much crypto stuff coming out of the SDNY in the future,” Hartman said. “We know our regulatory partners are very active in this space.” Agencies like the SEC and the Commodity Futures Trading Commission (CFTC) are taking the lead, leaving Manhattan prosecutors free to focus on other priorities.

This aligns perfectly with the arrival of Jay Clayton as Manhattan’s new U.S. Attorney. Clayton, President-elect Donald Trump’s pick, led the SEC from 2017 to 2021. Back then, the crypto market was smaller, and Clayton’s approach was less aggressive compared to current SEC Chair Gary Gensler.

Now, Clayton replaces Damian Williams, who served under President Joe Biden. The timing couldn’t be better for the crypto crowd.

Bitcoin hits $93K as Trump’s crypto promises take center stage

If Wall Street loves one thing, it’s certainty. And Trump’s election victory gave the crypto market exactly that. Bitcoin broke the $90,000 barrier this week to hit $93,000—its highest price ever. Trump promised on the campaign trail to make the U.S. the “crypto capital of the planet” and turn America into a “bitcoin superpower.” Investors ate it up.

Standard Chartered analyst Geoff Kendrick predicted this exact scenario in September. He said crypto would rally no matter who won the election, but Trump’s victory would supercharge the gains. Since election night, bitcoin has surged 30%, with no signs of slowing down. 

“The next price target we’re looking at is $100,000,” said Federico Brokate, vice president at 21Shares, a crypto ETF firm. “We think we could reasonably reach that by Inauguration Day.” For now, the market is all green lights and bulls.

Lower interest rates are helping too. Risky assets like crypto thrive in low-rate environments, and the Federal Reserve’s policy is giving investors even more reasons to pile in. Spot Bitcoin ETFs, which launched less than a year ago, have already captured $50 billion in assets. 

But don’t think this is the top of the crypto mountain. Experts like Andy Baehr of Coindesk Indices say there’s massive untapped potential. Retail investors—dubbAnalystsed “five percenters”—are just starting to get in on the action. These are folks who put a small slice of their portfolios into crypto.

Thanks to easier access through brokerages and ETFs, more of them are joining the party. And if Trump delivers on his regulatory promises, the market will explode even further.

Regulatory chaos may finally calm down

Trump’s crypto-friendly stance is a big reason for the optimism. Over the past four years, the SEC under Gensler has been a nightmare for the industry. He treated crypto like the “Wild West” and leaned heavily on enforcement instead of setting clear rules.

Companies spent more time in court than building products. Take the Grayscale case as an example. The SEC tried blocking Grayscale’s spot Bitcoin ETF, but a judge shut that down. It was a landmark victory for crypto, paving the way for ETFs tied to actual Bitcoin instead of futures contracts. Now, crypto firms believe Trump’s administration will clear the backlog of pending ETF applications.

Gensler is widely expected to step down, and whoever replaces him will likely be more business-friendly. Matt Hougan of Bitwise Asset Management called Trump’s election a “game-changer” for crypto.  Imagine what happens when the headwinds abate,” he said. 

VanEck, a major asset management firm, is already preparing for the change. CEO Jan van Eck reportedly told his team to fast-track new crypto ETF products after Trump’s victory became clear.

Matt Sigel, VanEck’s head of digital asset research, expects a Solana ETF to hit the market by the end of next year. “We would expect the SEC to approve more crypto products than they have in the past four years,” he said.

Meanwhile, Gensler recently defended his track record, saying, “Crypto is a field where there has been significant investor harm. Aside from speculative investing and illicit activities, most crypto assets lack sustainable use cases.” The SEC maintains that its approach protects investors, even if it frustrates industry insiders and destablizes markets.