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

Original Translation: Luffy, Foresight News

A certain cryptocurrency company operated by billionaire brothers, the Winklevoss twins, once faced a harsh federal lawsuit. However, after Donald Trump returned to the White House, the U.S. Securities and Exchange Commission (SEC) decided to pause the case. Prior to this, the SEC had also filed a lawsuit against the world's largest cryptocurrency exchange, Binance, but this lawsuit was completely dropped after the new administration took office. Additionally, after years of litigation with Ripple Labs, the new SEC attempted to reduce the penalties imposed by the court on this cryptocurrency company.

An investigation by The New York Times found that the SEC's retreat in these cases reflected 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 No regulatory agency has ever withdrawn multiple lawsuits against the same industry on such a large scale. However, The New York Times found that after Trump's return to office, over 60% of the enforcement actions in progress by the SEC related to cryptocurrency were either relaxed—either through pausing the litigation process, reducing penalties, or outright dismissing the cases.

The investigation also pointed out that the dismissal of cryptocurrency cases was particularly unusual. During the Trump administration, the proportion of cryptocurrency-related cases dismissed by the SEC was much higher than that of cases in other industries. While the specifics of these cryptocurrency lawsuits varied, many of the companies involved had one thing in common: financial ties to Trump, the self-proclaimed "Cryptocurrency President."

As the highest federal agency regulating misconduct in financial markets, the SEC is no longer actively pursuing any known Trump-affiliated entity. Lawsuits against all companies involved in cryptocurrency businesses with the Trump family or those that have contributed to his political activities have been dropped. The remaining cryptocurrency-related cases pursued by the agency now involve defendants who are relatively unknown and have no apparent ties to Trump.

- The SEC has dismissed a total of 7 cryptocurrency cases, with 5 of the implicated companies known to have ties to Trump;

· 7 additional cryptocurrency cases have been suspended, favorable settlement solutions are being drafted, or concessions are being made, with 3 of the involved companies known to be associated with Trump;

· There are now only 9 cases remaining without dismissal, and the parties involved in these cases have no known association with Trump.

In a statement, the SEC stated that there was never any political favoritism involved in handling cryptocurrency enforcement cases, and that the adjustment in enforcement direction was made based on legal and policy considerations, including doubts about its own regulatory authority over the cryptocurrency industry. The SEC also stated that even before Trump's support for the cryptocurrency industry, current Republican commissioners fundamentally opposed bringing most cryptocurrency-related lawsuits, while emphasizing that the SEC "places great emphasis on securities fraud issues and effectively upholds investor rights."

There is currently no evidence that the president pressured the SEC to show favoritism toward specific cryptocurrency companies. The New York Times also found no evidence that these companies influenced the trajectory of the cases by providing political donations to Trump or engaging in business partnerships, and some financial transactions and business collaborations even occurred after the SEC adjusted its approach to case handling.

However, the crux of the issue is that Trump is both a participant in the cryptocurrency industry and its highest policy maker. As president, if the policies he advocates align closely with his own interests, there will be a conflict of interest, and many cryptocurrency companies sued by the SEC are associated with him, highlighting the existence of such a conflict.

At the beginning of Trump's second term, the White House publicly stated that the president would "stop harsh enforcement actions and excessive regulatory measures that hinder cryptocurrency innovation." Previously, while the SEC's revocation of individual cryptocurrency cases had already attracted public attention, an analysis of thousands of court records and dozens of interviews by The New York Times revealed that the SEC's relaxation of cryptocurrency regulation this year far exceeded previous levels, and allies of Trump in the cryptocurrency industry also greatly benefited from this, none of which had been fully exposed before.

All defendants involved in this investigation denied any wrongdoing, with many defendants claiming they were only accused of procedural violations. In addition, in some of the cases where the SEC eased its approach, the companies involved had no apparent connection to the president.

SEC's newly appointed chairman, Paul S. Atkins, stated that the cryptocurrency industry is entering a new chapter, a sentiment welcomed by cryptocurrency companies.

White House Press Secretary Karoline Leavitt has refuted the claim of conflicts of interest involving Trump and his family, stating that the relevant policies implemented by Trump are "fulfilling the President's commitment by promoting innovation, creating economic opportunities for all American people, and helping the U.S. become a global cryptocurrency hub."

The Trump administration has significantly relaxed regulations on the cryptocurrency industry, with the U.S. Department of Justice even dissolving the cryptocurrency enforcement division. The SEC's policy shift this year can be described as a 180-degree turn.

An analysis by The New York Times shows that during the Biden administration, the SEC has filed an average of more than two cryptocurrency-related cases per month, with cases being heard in federal courts and internal institutional legal systems. Even during Trump's first term, the SEC would file approximately one cryptocurrency-related case per month on average, including the high-profile Ripple lawsuit.

In stark contrast, since Trump's re-election, the SEC has not filed any cryptocurrency-related cases, while continuing to pursue dozens of lawsuits against other industries.

In a statement, Atkins stated that these actions by the SEC were merely to correct the previous government's overly aggressive regulatory stance toward the cryptocurrency industry. He stated that the SEC during Biden's tenure used enforcement powers to forcibly implement new policies. He also emphasized: "I have clearly stated that we will completely abandon the model of enforcement replacing regulation."

Just as cryptocurrency companies were celebrating this new era, senior SEC lawyers who had led the handling of related cases were deeply concerned about the trend of regulatory relaxation. They are worried that this institution, founded during the Great Depression and with nearly a century of history, was originally intended to protect investors' interests and maintain market order. Now, the relaxation of regulatory efforts will embolden the cryptocurrency industry, potentially harming consumer rights and even posing risks to the entire financial system.

Christopher E. Martin, a former senior litigation lawyer at the SEC who had led a lawsuit against a cryptocurrency company, chose to retire after the SEC dropped the case this year. Referring to the SEC's broad regulatory relaxation this time, he bluntly said, "This is a complete compromise and retreat, basically leading investors into a pit of fire."

End of Regulatory Suppression

U.S. Securities and Exchange Commission building in Washington, D.C.

At the end of last year, inside the glass-walled SEC headquarters in Washington, regulatory action on cryptocurrency had nearly come to a standstill. SEC Chairman Gary Gensler, during the Biden administration, had hoped to advance several cryptocurrency investigations, but his tenure is now in its final countdown.

Previously, Trump had just announced a cryptocurrency project called World Liberty Financial with his family, then successfully won reelection as president, openly declaring his intention to curb the SEC's power.

In fact, Trump had not always supported the cryptocurrency industry. During his first term, he had tweeted that cryptocurrency was nothing but air and could even fuel illegal activities such as drug trafficking. The SEC at that time also took a tough regulatory stance, not only establishing a department to investigate network misconduct in the cryptocurrency field but also initiating dozens of related lawsuits.

By the time of the Biden administration, the SEC's regulation of cryptocurrency had been further intensified. In 2022, the large cryptocurrency exchange platform FTX collapsed, and that same year, the SEC's cryptocurrency regulatory department nearly doubled in size, expanding its team of lawyers and industry experts to about 50 people.

Whether during Trump's first term or the Biden administration, the SEC has always believed that since investors may put their life savings into the cryptocurrency sector, they have the right to understand the risks involved. However, a thorny legal issue has always plagued the SEC: does the agency really have the authority to bring related lawsuits against the cryptocurrency industry? The answer to this question depends on whether cryptocurrency is considered a security, a modern derivative of stocks and other financial instruments.

The SEC stated that many cryptocurrencies are fundamentally securities, so cryptocurrency exchanges and brokers, among other institutions, must register with the SEC, disclose detailed information as required, and some institutions may also be subject to independent audits. Failure to fulfill registration obligations may lead the SEC to file lawsuits under securities laws.

However, the cryptocurrency industry argues that most cryptocurrencies are not securities but a special type of financial product that should have specific regulatory rules, which the SEC has not yet established. Summer Mersinger, CEO of the Blockchain Association, a cryptocurrency industry association, said, "We are not seeking to escape regulation, just hoping for clear and definite rules as the basis for operations."

In 2024, a turning point began to emerge as Trump's attitude shifted from questioning cryptocurrency to wholeheartedly praising it. In July of that year, he pledged to cryptocurrency practitioners in a speech that the "deliberate suppression" of the industry would soon cease and also stated, "I will fire Gary Gensler on the first day in office."

At the Bitcoin conference held in Nashville in 2024, Trump made positive comments on cryptocurrency, a stark contrast to his previous skepticism.

The SEC, as an independent agency, consists of 5 commissioners appointed by the President, with the chairman typically aligning with the appointing administration's position. Decisions on whether to bring a case, settle, or dismiss it are put to a vote among the commissioners, while the actual investigative work is carried out by dedicated enforcement staff. This system allows for flexibility in adjusting regulatory focus and prevents significant policy swings due to political shifts.

Following Trump's reelection, there was a significant shift in the SEC's stance. Shortly after the election, Gensler announced his resignation. While the cryptocurrency regulatory department was once a hotbed for career advancement, it suddenly became a "hot potato" thereafter.

During the presidential transition, according to insiders speaking on condition of anonymity, Sanjay Wadhwa, enforcement chief under Gensler, pleaded with enforcement staff to "get paid by the American people to do what we do."

However, some staff began to backpedal. Insiders revealed that a senior manager in the cryptocurrency regulation team took an unauthorized lengthy vacation, ignored emails related to cases, another manager refused to sign off on a few cryptocurrency case-related documents filed by the SEC post-election, and some staff outright stopped working on cryptocurrency cases, leading to a complete halt in Gensler's final phase efforts to advance regulation.

Victor Suthammanont, who served at the SEC for a decade and was Gensler's enforcement advisor before leaving, stated that through two government transitions, staff consistently held their ground and performed their duties as usual. "But this transition is entirely different, the internal atmosphere of the institution changed instantly," Suthammanont said, although he did not discuss specific cases.

Following Trump's reelection, Gary Gensler announced he would step down

Once Trump was sworn in, the situation became irreversible. He first appointed Republican SEC Commissioner Mark T. Uyeda as acting chairman until his nominee, Paul S. Atkins, was Senate-confirmed. Uyeda, who has long been against the SEC's approach to cryptocurrency cases, stated in an interview with The New York Times that many of Gensler's regulatory actions were based on "new theories unsupported by existing law."

However, Gensler expressed the opposite view as early as 2022 in a speech, stating, "Even with new technology, existing laws will not become obsolete."

In early February 2025, Uyeda moved Jorge G. Tenreiro from his position as SEC litigation chief. Tenreiro had previously led the cryptocurrency regulation division and had overseen many related cases. This time, he was reassigned to the information technology department, which was seen internally at the SEC as a demotion with an insulting undertone.

After Tenreiro's departure, the SEC began halting investigations into several cryptocurrency companies that may face litigation. While some investigations are still ongoing, at least 10 companies have publicly announced that they are no longer under SEC investigation, with one company issuing a related announcement just last week.

No Room for Negotiation

Mark T. Uyeda is one of the Republican commissioners of the U.S. Securities and Exchange Commission and served as acting chairman until Atkins was confirmed by the Senate.

Uyeda soon faced an even more challenging dilemma: how to deal with those cryptocurrency litigation cases that were still pending from the Biden administration. While it is common for the SEC to suspend investigations, dismissing cases under trial is extremely rare and requires a vote of approval from the Commission members.

The United States' largest cryptocurrency exchange platform, Coinbase, was sued by the SEC for failing to fulfill registration obligations, a highly watched case in the cryptocurrency field. During the Biden administration, Coinbase adopted a tough defense strategy and successfully persuaded the judge to allow appellate review of the case before trial.

Now under the Trump administration's SEC control, Coinbase is one of the first companies to apply to dismiss the case. As a rule, the SEC Chairman's Office usually does not get involved in negotiating such cases; enforcement officers are typically responsible. However, during this negotiation process, staff from Uyeda's office participated in some negotiations with Coinbase alongside enforcement lawyers.

Coinbase's Chief Legal Officer, Paul Grewal, a former federal judge, stated in an interview, "We always ensure timely synchronization of case negotiation progress with the Chairman's Office to ensure a comprehensive understanding of the situation." Uyeda, on the other hand, stated that his staff's participation in such negotiation meetings was "completely in line with regulations."

Initially, the SEC under Uyeda's leadership was not willing to completely dismiss the case. Insiders revealed that the SEC's initial proposal was just to pause the case. However, this proposal was rejected by Coinbase.

Subsequently, the SEC made a larger concession by proposing to dismiss the case but retaining the right to reopen the case in the future if the leadership's stance changed. However, this proposal was still not accepted by Coinbase. Grewal firmly stated, "Our position is very clear, either they completely drop the suit, or we continue to defend, there is no room for negotiation on this matter."

Ultimately, the SEC chose to compromise. At that time, two Democratic commissioners, including Gensler, had left, leaving the SEC Commission with only two Republican commissioners and one Democratic commissioner.

While Uyeda did not respond specifically to this decision, he stated, "Continuing to pursue such cases is not appropriate, especially if the SEC may no longer endorse the relevant theories underlying the case in the short term, it is even more inappropriate to insist on proceeding."

SEC's remaining Democratic commissioner, Caroline A. Crenshaw, bluntly stated in an interview that the SEC's actions have allowed the cryptocurrency industry to have the upper hand, "They can do almost anything they want without facing any consequences."

Attitude Shift

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

Following the dismissal of the Coinbase case, the cryptocurrency industry widely viewed it as a signal of the SEC's compromise. Lawyers for other cryptocurrency companies also followed suit, seeking similar outcomes for their respective clients. By the end of May, the SEC had dismissed another 6 cryptocurrency-related cases.

An analysis of court records by The New York Times revealed that this phenomenon is highly unusual. During the Biden administration, the SEC had never voluntarily dismissed any of the cryptocurrency cases left over from the first term of the Trump administration. Only during this time period, a case was partially dismissed due to the death of one defendant and another case had some litigation requests partially withdrawn due to an unfavorable ruling by a judge.

Surprisingly, during the second term of the Trump administration, 33% of the cryptocurrency cases left over from the Biden administration were dismissed, while the dismissal rate for cases in other industries was only 4%.

Despite the SEC's repeated promises to continue to pursue securities fraud, it has still withdrawn the lawsuit against Binance. Previously, the SEC accused two affiliated entities under Binance of fraud, alleging that they misled consumers in preventing market manipulation.

In addition, the SEC has also requested the court to stay proceedings on the fraud case against Justin Sun and his founded Tron Foundation. There are a total of 4 such cases stayed for settlement negotiations, and the SEC has not yet disclosed the outcome of this case.

The Trump administration took over a total of 23 cryptocurrency cases, with 21 originating during the Biden administration and 2 being legacy cases from Trump's first term, of which the SEC has relaxed its approach to 14 cases. Among these 14 cases, 8 involved enterprises that were associated with Trump and his family before and after the case handling.

Cryptocurrency Companies' Association with Trump or His Family Enterprises

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

In the weeks leading up to the dismissal of the Binance case, the company was involved in a $20 billion business transaction that used a stablecoin issued by World Liberty Financial. This transaction is expected to generate tens of millions of dollars in annual income for the Trump family.

A spokesperson for World Liberty Financial stated that "the company has no affiliation with the U.S. government" and "will not influence government policy-making and decision-making processes." Binance, in its statement, said that the SEC's lawsuit against it is fundamentally "targeted suppression of the cryptocurrency industry."

In March 2025, the SEC withdrew the case accusing the cryptocurrency trader Cumberland of engaging in securities trading without registration. About two months later, Cumberland's parent company, DRW, invested nearly $1 billion in a media company owned by the Trump family. Executives at DRW said that the company only received the investment opportunity after the case was withdrawn and that the SEC dismissed the case simply because the related charges lacked factual basis.

Ripple once donated nearly $5 million to Trump's inauguration ceremony and the company has been embroiled in legal battles. During Trump's first term, the SEC accused Ripple of failing to disclose key information to investors during the issuance of a cryptocurrency token. Last year, a federal judge dismissed some of the SEC's charges but still ruled that Ripple had committed securities violations and ordered it to pay a $125 million fine.

After Trump's reelection, the SEC tried to reduce the fine amount to $50 million. The judge harshly criticized the SEC's flip-flop behavior and rejected this request. Ripple argued to the judge that it should receive a lighter penalty, in part because the SEC had dismissed several subsequent similar cryptocurrency cases. In the end, Ripple still paid the full fine. In July this year, a media company owned by the Trump family announced plans to include Ripple's issued cryptocurrency in one of its publicly offered investment funds.

Hester Peirce is an SEC Republican commissioner and also leads the agency's newly formed cryptocurrency special working group. In an interview, she said that dismissing many cryptocurrency cases was to correct past mistakes, as these cases should never have been brought in the first place.

She stated: "I think the real overreach happened in the prior years when many of the cases brought by the SEC had no legal basis to begin with." She also added that these lawsuits hindered legitimate industry innovation. Peirce emphasized that case handling is based solely on facts and circumstances, unrelated to the "personal connections of the parties involved," without any political or economic considerations.

Financial Power

In the cryptocurrency industry, few are closer to Trump than the brothers Tyler Winklevoss and Cameron Winklevoss. The brothers founded and operate the cryptocurrency company Gemini Trust. They not only provided financial support to fundraising committees supporting Trump's reelection and other Republican-related organizations but also funded the renovation project of the White House banquet hall favored by Trump. In addition, they provided funding to a high-end private club in Washington called Executive Branch, of which Trump's son Eric Trump is a shareholder.

The brothers' investment firm recently invested in a new cryptocurrency mining company called American Bitcoin. Trump's son Eric Trump is the co-founder and chief strategy officer of this company, and his son Donald Trump Jr. is also involved in the investment.

The Winklevoss Brothers' Connection to the Trump Family

Trump has publicly praised the brothers, calling them "the complete package of intelligence and good looks." He commented at a White House event, saying, "They have the looks, they have the brains, and they have a tremendous amount of wealth."

However, Gemini Trust has also been involved in legal disputes.

In December 2020, Gemini Trust partnered with another company, Genesis Global Capital, to offer Gemini's customers the service of lending their crypto assets to Genesis, who would then lend these assets to larger institutional investors.

Genesis would pay interest to users and promise users the ability to redeem their assets at any time; Gemini would act as an intermediary and earn a corresponding share. Gemini had advertised that the project could provide an annualized yield of up to 8% for account holders.

San Diego data scientist Peter Chen, in an interview, stated that he trusted Gemini and had invested over $70,000 in the project.

"Gemini gave me the impression of operating in compliance and abiding by the rules, being one of the most regulatory-compliant companies in the cryptocurrency field," he recalled.

Peter Chen stated that the reason he invested over $70,000 in Genesis was because he trusted Gemini Trust.

However, by the end of 2022, Genesis had plunged into a bankruptcy crisis, freezing the accounts of 230,000 customers.

A 73-year-old grandmother had pleaded with Gemini to return her life savings of $199,000. Lawsuit documents filed by the New York State regulatory agency revealed that she wrote in her plea, "Without this money, I am completely at a loss."

In May 2024, Genesis reached a $2 billion settlement with the New York State regulatory agency, ultimately allowing customers' funds to be recovered. Gemini also settled with New York State, committing to pay up to $50 million if necessary to compensate for any remaining losses for customers. Gemini insisted on its innocence, attributing this crisis to Genesis and emphasizing that ultimately no customers incurred losses.

However, the SEC also filed lawsuits against these two companies, accusing them of conducting unregistered cryptocurrency asset sales. Tyler Winklevoss referred to this lawsuit as a "fabricated accusation" on social media.

Genesis chose to settle with the SEC, but Gemini insisted on litigating. It wasn't until April 2025 that the SEC suddenly moved to suspend the case's proceedings to allow for a negotiated solution. In September of the same year, the SEC revealed that it had reached a settlement agreement with Gemini, which is currently awaiting a vote by the commissioners.

The SEC informed the federal judge responsible for overseeing this case that the agreement "will permanently end this litigation dispute."

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