The New York Times: After Trump Returns to the White House, Major Retreat in US SEC Crypto Lawsuits

Original Title: The S.E.C. Was Tough on Crypto. It Pulled Back After Trump Returned to Office

Original Authors: Ben Protess, Andrea Fuller, Sharon LaFraniere, Seamus Hughes, The New York Times

Translated by: Luffy, Foresight News

A cryptocurrency company operated by billionaire Winklevoss twins once faced a severe federal lawsuit, but after Donald Trump returned to the White House, the U.S. Securities and Exchange Commission (SEC) decided to suspend the case. Previously, the SEC had also sued Binance, the world's largest cryptocurrency exchange, but after the new administration took office, the lawsuit was completely withdrawn. Additionally, after years of litigation with Ripple Labs, the new SEC tried to reduce the penalties imposed on this crypto company by the court.

An investigation by The New York Times found that the SEC's retreat in these cases reflects a comprehensive shift in the federal government's attitude toward the cryptocurrency industry after Trump began his second term. No regulatory agency has ever withdrawn multiple lawsuits against the same industry on a large scale. However, The New York Times found that when Trump returned to office, more than 60% of the crypto-related cases the SEC was advancing were relaxed—either suspending litigation, reducing penalties, or directly dismissing cases.

The investigation also pointed out that the move to dismiss crypto cases is particularly unusual. During Trump's administration, the proportion of crypto company cases dismissed by the SEC was much higher than the dismissal rate for other industries. Although the specifics of these crypto lawsuits vary, many of the companies involved share a common trait: financial ties to Trump, who calls himself the "crypto president."

As the highest federal agency regulating financial market violations, the SEC is no longer actively pursuing any known Trump-related companies. For all companies that have cooperated with the Trump family’s crypto businesses or have funded his political activities, the SEC has withdrawn related lawsuits. Now, the agency’s only remaining crypto-related cases involve obscure entities with no apparent connection to Trump.

· The SEC has dismissed a total of 7 crypto cases, 5 of which involved companies with known ties to Trump;

· Another 7 crypto cases have been suspended, with favorable settlement proposals or concessions, 3 of which involved companies with known ties to Trump;

· Only 9 cases remain without dismissal, and none of the parties involved are known to be connected to Trump.

In a statement, the SEC said that there was never any political favoritism in handling crypto enforcement cases, and the adjustment in enforcement direction was due to legal and policy considerations, including doubts about its own authority to regulate the crypto industry. The SEC also stated that even before Trump supported the crypto industry, current Republican commissioners fundamentally opposed most crypto-related lawsuits, emphasizing that the SEC "attaches great importance to securities fraud issues and genuinely protects investors' interests."

There is currently no evidence that the president pressured the SEC to give special treatment to specific crypto companies. The New York Times also found no evidence that these companies influenced the outcome of cases by providing political donations or business cooperation to Trump; some financial transactions and business collaborations even occurred after the SEC adjusted its handling of the cases.

But the core issue is that Trump is both a participant in the crypto industry and its top policy maker. As president, if the policies he promotes align closely with his own interests, conflicts of interest arise, and many crypto companies sued by the SEC are connected to him, highlighting the existence of such conflicts.

At the start of Trump’s second term, the White House publicly declared that the president would "stop the tough enforcement actions and excessive regulation that hinder crypto innovation." Previously, the SEC’s withdrawal of individual crypto cases had already attracted public attention, but The New York Times, after analyzing thousands of court records and conducting dozens of interviews, found that this year the SEC’s relaxation of crypto regulation far exceeded the past, and Trump’s allies in the crypto industry have greatly benefited—facts that had not been fully exposed before.

All defendants involved in this investigation deny any wrongdoing, and many claim they were only accused of procedural violations. In addition, some cases that the SEC relaxed involved companies with no apparent connection to the president.

Paul S. Atkins, the new SEC chairman appointed by Trump, said the crypto industry will usher in a new chapter, which crypto companies have welcomed.

White House Press Secretary Karoline Leavitt refuted claims of conflicts of interest involving Trump and his family, stating that Trump’s policies "fulfill the president’s promise to promote innovation, create economic opportunities for all Americans, and help the U.S. become the global center for crypto."

The Trump administration has comprehensively relaxed regulation of the crypto industry, and the U.S. Department of Justice has even disbanded its crypto enforcement division. The SEC’s policy shift this year is nothing short of a 180-degree turn.

Analysis by The New York Times shows that during Biden’s administration, the SEC filed more than two crypto-related cases per month on average, with cases handled through both federal courts and the agency’s internal legal system. Even during Trump’s first term, the SEC filed about one crypto-related case per month on average, including the high-profile Ripple lawsuit.

In stark contrast, after Trump returned to office, the SEC has not filed any new crypto-related cases, while dozens of lawsuits against other industries are still being advanced.

Atkins stated in a statement that these SEC actions are merely to correct the previous administration’s overly aggressive regulatory stance toward the crypto industry. He said that the SEC under Biden used enforcement power to forcibly implement new policies. He also emphasized: "I have made it clear that we will completely abandon the model of using enforcement instead of regulation."

While crypto companies are celebrating this new era, senior SEC lawyers who once led related cases are deeply concerned about the trend of relaxed regulation. They worry that this agency, established during the depths of the Great Depression and with nearly a century of history, was originally intended to protect investors and maintain market order. Now, the relaxation of regulation may embolden the crypto industry, harm consumers, and even pose risks to the entire financial system.

Christopher E. Martin, a former senior litigation attorney at the SEC who led a lawsuit against a crypto company, chose to retire after the SEC dismissed the case this year. Speaking about the SEC’s widespread regulatory relaxation, he said bluntly: "This is a total compromise and retreat, basically throwing investors to the wolves."

The End of Regulatory Crackdown

The U.S. Securities and Exchange Commission building in Washington

By the end of last year, regulatory actions against crypto at the SEC headquarters in Washington, with its glass façade, had nearly come to a halt. Gary Gensler, the SEC chairman during Biden’s administration, had intended to advance several crypto investigations, but his term was nearing its end.

Previously, Trump had just announced the launch of a crypto project called World Liberty Financial with his family, then successfully won re-election as president, and had long publicly declared his intention to limit the SEC’s power.

In fact, Trump was not always a supporter of the crypto industry. During his first term, he tweeted that crypto was "thin air" and could facilitate illegal activities like drug trafficking. At that time, the SEC also took a tough regulatory stance, establishing a special department to crack down on crypto-related online violations and filing dozens of related lawsuits.

During Biden’s administration, the SEC’s regulation of crypto intensified further. In 2022, the large crypto exchange FTX collapsed, and that same year the SEC’s crypto regulatory division nearly doubled in size, expanding its team of lawyers and industry experts to about 50 people.

Whether during Trump’s first term or Biden’s administration, the SEC has always believed that since investors might put their life savings into crypto, they have the right to know the risks. But a thorny legal question has always troubled the SEC: does the agency really have the authority to bring lawsuits against the crypto industry? The answer depends on whether crypto is considered a security, a derivative of modern stocks and other financial instruments.

The SEC claims that many cryptocurrencies are essentially securities, so crypto exchanges and brokers must register with the SEC, disclose detailed information as required, and some must undergo independent audits. If they fail to register, the SEC can sue them under securities law.

The crypto industry counters that most cryptocurrencies are not securities but a special type of financial product that should have their own regulatory rules, which the SEC has not yet established. Summer Mersinger, CEO of the Blockchain Association, said: "We’re not looking to avoid regulation, we just want clear and definite rules to operate by."

In 2024, the situation began to shift, and Trump’s attitude changed from skepticism to praise of crypto. In July of that year, he promised crypto industry participants in a speech that the "deliberate crackdown" on the industry would soon end, and declared, "On my first day in office, I’ll fire Gary Gensler."

At the 2024 Bitcoin conference in Nashville, Trump made positive remarks about crypto, a sharp contrast to his previous skepticism.

The SEC, as an independent agency, has five commissioners appointed by the president, and the chairman usually aligns with the administration that appointed them. Whether to file, settle, or dismiss a case requires a vote by the commissioners, but actual investigations are handled by dedicated enforcement staff. This mechanism allows for flexible adjustment of regulatory priorities while avoiding drastic policy swings due to political changes.

But after Trump won his second election, the atmosphere at the SEC changed dramatically. Shortly after the election, Gensler announced his resignation. The crypto regulatory division, once a hot spot for career advancement, suddenly became a "hot potato."

According to anonymous sources, during the presidential transition, Gensler’s enforcement chief Sanjay Wadhwa urged staff to "do the job the American people pay us to do."

But some staff began to back off. Sources said a senior executive in the crypto regulatory team took several weeks of unauthorized leave and ignored emails related to cases; another executive refused to sign documents for the few crypto cases the SEC filed after the election; and some staff simply stopped handling crypto cases, completely stalling Gensler’s final push for regulation.

Victor Suthammanont, who worked at the SEC for ten years and was Gensler’s enforcement advisor before leaving, said that after two previous government transitions, staff always stayed on and did their jobs. "But this transition was completely different; the internal atmosphere changed instantly," Suthammanont said, though he did not discuss specific cases.

Gary Gensler announced his resignation after Trump won re-election

After Trump was sworn in, the situation became irreversible. He first appointed SEC Republican commissioner Mark T. Uyeda as acting chairman until his nominee Paul S. Atkins was confirmed by the Senate. Uyeda has long opposed the SEC’s approach to crypto cases, telling The New York Times that many of Gensler’s regulatory moves were based on "new theories lacking support in existing law."

Gensler, however, had expressed the opposite view in a 2022 speech, saying: "Even with new technology, existing laws do not become invalid."

In early February 2025, Uyeda reassigned Jorge G. Tenreiro from his position as SEC litigation chief. Tenreiro had previously led the crypto regulatory division and many related cases, but was transferred to the IT department, which was seen internally as a humiliating demotion.

After Tenreiro’s departure, the SEC began to halt investigations into several crypto companies that might have faced lawsuits. Although some investigations are still ongoing, at least 10 companies have announced they are no longer under SEC investigation, with one making such an announcement just last week.

No Room for Negotiation

Mark T. Uyeda is one of the Republican commissioners of the SEC and served as acting chairman until Atkins was confirmed by the Senate.

Uyeda soon faced an even tougher challenge: how to handle the crypto lawsuits left over from Biden’s administration that were still ongoing. It’s common for the SEC to shelve investigations, but dismissing ongoing cases is extremely rare and requires a vote by the commissioners.

Coinbase, the largest U.S. crypto exchange, was sued by the SEC for failing to register, a high-profile case in the crypto field. During Biden’s administration, Coinbase took a tough defense, successfully convincing the judge to allow an appellate review before trial.

Now under Trump’s SEC, Coinbase became one of the first companies to apply for case dismissal. Normally, the SEC chairman’s office does not get involved in such negotiations, which are handled by enforcement staff. But in this case, staff from Uyeda’s office participated in some negotiations with Coinbase alongside enforcement lawyers.

Coinbase Chief Legal Officer Paul Grewal, a former federal judge, said in an interview: "We always ensured that the chairman’s office was kept fully informed of the progress of case negotiations." Uyeda said his staff’s participation in such meetings was "completely appropriate."

At first, the SEC under Uyeda was unwilling to fully dismiss the case. Sources said the SEC’s initial proposal was to suspend the case. But Coinbase rejected this offer.

The SEC then made a bigger concession, proposing to dismiss the case but retain the right to reopen it if future leadership changed its mind. This proposal was also rejected by Coinbase. Grewal stated firmly: "Our position was clear: either they dismiss the case entirely, or we continue to litigate—there was no room for negotiation."

In the end, the SEC chose to compromise. At that time, Gensler and two other Democratic commissioners had resigned, leaving only two Republican and one Democratic commissioner on the SEC.

Uyeda did not comment on this specific decision, but said: "It is not appropriate to continue advancing such cases, especially if the SEC may soon no longer support the theories on which the cases are based."

The SEC’s only remaining Democratic commissioner, Caroline A. Crenshaw, said in an interview that the SEC’s approach gives the crypto industry a huge advantage: "They can basically do whatever they want without any consequences."

Attitude Shift

Caroline A. Crenshaw is the only Democratic commissioner at the SEC

After the Coinbase case was dismissed, the crypto industry saw it as a signal of SEC compromise. Lawyers for other crypto companies followed suit, seeking similar outcomes for their clients. By the end of May, the SEC had dismissed another 6 crypto-related cases.

The New York Times found through court record analysis that this phenomenon is extremely unusual. During Biden’s administration, the SEC never proactively dismissed any crypto cases left over from Trump’s first term. Only one case was dismissed due to the defendant’s death, and another case was partially dismissed after an adverse court ruling.

But after Trump began his second term, 33% of the crypto cases left over from Biden’s administration were dismissed, compared to only 4% for other industries.

Although the SEC repeatedly promised to continue pursuing securities fraud, it still dismissed its lawsuit against Binance. Previously, the SEC accused two Binance affiliates of fraud, saying they misled consumers about preventing manipulative trading.

In addition, the SEC applied to the court to suspend a fraud case against Justin Sun and his Tron Foundation. There are four such cases suspended for negotiation and settlement, and the SEC has not yet announced the outcome of this case.

The Trump administration inherited a total of 23 crypto cases, 21 from Biden’s administration and 2 from Trump’s first term, and the SEC has relaxed its handling of 14 of them. Of these 14, 8 involved companies that established ties with Trump or his family before or after the cases were handled.

Connections between crypto companies and Trump or his family businesses

For example, Justin Sun spent $75 million to buy tokens issued by World Liberty Financial. The Tron Foundation did not respond to multiple requests for comment, and Justin Sun and the Tron Foundation stated in court filings that the SEC not only lacks evidence of fraud but also has no authority to sue them.

In the weeks before the Binance case was dismissed, the company participated in a $2 billion business deal using stablecoins issued by World Liberty Financial. This deal is expected to bring tens of millions of dollars in annual revenue to the Trump family.

A spokesperson for World Liberty Financial said, "The company has no connection to the U.S. government" and "will not influence government policy-making or decision-making processes." Binance said in a statement that the SEC’s lawsuit was essentially "targeted suppression of the crypto industry."

In March 2025, the SEC dismissed its case against crypto dealer Cumberland for conducting unregistered securities trading. About two months later, Cumberland’s parent company DRW invested nearly $100 million in a Trump family media company. DRW executives said the investment opportunity arose only after the case was dismissed, and the SEC dropped the case simply because the allegations lacked factual basis.

Ripple donated nearly $5 million to Trump’s inauguration and was also embroiled in litigation. During Trump’s first term, the SEC accused Ripple of failing to disclose key information to investors when issuing crypto tokens. Last year, a federal judge dismissed some SEC charges but still found Ripple guilty of securities violations and fined it $125 million.

After Trump returned to office, the SEC tried to reduce the fine to $50 million. The judge harshly criticized the SEC’s flip-flopping and rejected the request. Ripple argued to the judge that it deserved leniency, partly because the SEC had dropped several similar crypto lawsuits. Ultimately, Ripple paid the full fine. In July this year, a Trump family media company announced plans to include Ripple-issued crypto in its public investment fund.

Hester Peirce, a Republican SEC commissioner who also leads the agency’s new crypto task force, said in an interview that dismissing many crypto cases was correcting past mistakes, as these cases should never have been brought in the first place.

She said: "I think the real overreach happened in previous years, when the SEC brought many cases that had no legal basis." She added that these lawsuits hindered legitimate industry innovation. Peirce emphasized that case handling is based solely on facts and specifics, unrelated to "the parties’ connections," and involves no political or economic considerations.

Financial Power

In the crypto industry, few have closer ties to Trump than Tyler and Cameron Winklevoss. The brothers founded and operate Gemini Trust, a crypto company. They have provided financial support to Trump’s re-election fundraising committee and other Republican groups, funded Trump’s favored White House banquet hall renovation, and supported a high-end private club in Washington called Executive Branch, where Trump’s eldest son Donald Trump Jr. is a shareholder.

The brothers’ investment company recently invested in a new crypto mining firm called American Bitcoin. Trump’s second son, Eric Trump, is the company’s co-founder and chief strategy officer, and Donald Trump Jr. also participated in the investment.

The Winklevoss brothers’ connections to the Trump family

Trump has repeatedly praised the brothers in public, calling them "talented and handsome." At a White House event, he said: "They have looks, brains, and vast wealth."

But Gemini Trust has also been embroiled in legal disputes.

In December 2020, Gemini Trust partnered with Genesis Global Capital to offer Gemini customers a service to lend crypto assets to Genesis, which would then re-lend them to larger institutional investors.

Genesis paid users interest and promised they could redeem assets at any time; Gemini acted as an intermediary, earning a share of the profits. Gemini advertised that the program could provide account holders with up to 8% annualized returns.

Peter Chen, a data scientist in San Diego, said in an interview that he invested over $70,000 in the program because he trusted Gemini.

"Gemini gave me the impression of being compliant and rule-abiding, one of the most well-regulated companies in crypto," he recalled.

Peter Chen said he invested over $70,000 in Genesis because he trusted Gemini Trust.

However, at the end of 2022, Genesis fell into bankruptcy and froze the accounts of 230,000 customers.

A 73-year-old grandmother pleaded with Gemini to return her $199,000 life savings. According to a lawsuit filed by New York state regulators, she wrote: "Without this money, I’m completely out of options."

In May 2024, Genesis reached a $2 billion settlement with New York state regulators, and customers eventually recovered their funds. Gemini also settled with New York, promising to pay up to $50 million if necessary to cover remaining customer losses. Gemini insists it did nothing wrong, blames Genesis for the crisis, and emphasizes that ultimately no customers lost money.

But the SEC also sued both companies, accusing them of offering crypto assets without registration. Tyler Winklevoss called the lawsuit "a deliberately fabricated charge" on social media.

Genesis chose to settle with the SEC, but Gemini insisted on fighting the case until April 2025, when the SEC suddenly proposed suspending the case to allow for a negotiated solution. In September of the same year, the SEC disclosed that it had reached a settlement with Gemini, which is still pending a vote by the commissioners.

The SEC told the federal judge handling the case that the agreement "will completely end this litigation."