The New York Times: Infighting,利益输送, Uncovering the true reason behind Trump's "pardon" of crypto

The New York Times conducted a systematic analysis for the first time on thousands of government documents and court records from the last three U.S. administrations, interviewing more than twenty current and former government officials.

A cryptocurrency company operated by the Winklevoss twins was facing serious federal court charges at the time. After Trump returned to the White House, the U.S. Securities and Exchange Commission (SEC) took action to freeze the case.

Previously, the SEC also sued Binance, the world’s largest cryptocurrency exchange, but after the new administration took office, the SEC completely withdrew its lawsuit against the company.

Additionally, after years of legal battles with Ripple Labs, the new SEC attempted to reduce the fines imposed by the court to lessen penalties on the crypto company.

A New York Times investigation found that the SEC’s retreat from these cases reflects a comprehensive shift in the federal government’s attitude toward the cryptocurrency industry during President Trump’s second term.

The collective withdrawal of lawsuits against a single industry by the SEC is unprecedented.

However, the New York Times discovered that when Trump returned to the White House, the SEC slowed down more than 60% of ongoing cryptocurrency cases, including suspending lawsuits, reducing penalties, or outright dismissing cases.

The investigation noted that such case dismissals are particularly unusual. During Trump’s tenure, the SEC’s withdrawal rate against crypto companies was much higher than for other types of cases.

While the specifics of these crypto lawsuits vary, a common point among the involved companies is that they all have financial ties to Trump, who calls himself the “Crypto President.”

As the top federal regulator of the U.S. financial markets, the SEC no longer actively investigates any company with a public connection to Trump.

A New York Times investigation found that for all companies linked to Trump’s family crypto ventures or that have funded his political career, the SEC has adopted a retreating stance. The only remaining crypto cases prosecuted by the SEC are against unknown defendants with no clear connection to Trump.

Case Handling Statistics (as of December 15, 2025):

• Cases outright dismissed: 7 └ 5 of which involve defendants with a public connection to Trump
• Cases with mitigated measures: 7 └ including suspending asset freezes, proposing favorable settlements, or substantial concessions └ 3 of which involve defendants with a public connection to Trump
• Cases maintained in original stance: 9 └ No public connection to Trump has been found so far

The SEC stated in a statement that political bias has “nothing to do” with their approach to cryptocurrency enforcement, and claimed that the agency’s shift was due to legal and policy reasons, including concerns over its regulatory authority in the industry. The SEC pointed out that even before Trump embraced the crypto industry, current Republican commissioners fundamentally disagreed with bringing most crypto cases, emphasizing their “serious approach to securities fraud and investor protection.”

There is no indication that the president pressured the agency to show leniency toward specific crypto companies. We also found no evidence that these companies attempted to influence their cases through donations or business ties with Trump, some of which were established after the SEC’s policy shift.

However, Trump, both a participant in the crypto industry and its highest decision-maker, stands to profit from companies regulated by his own government. Many companies sued by the SEC have connections to him, highlighting conflicts of interest where the president promotes policies that serve his own interests.

At the start of his second term, the White House announced that the president would “stop aggressive enforcement actions and overregulation that stifle crypto innovation.”

Although the SEC’s abandonment of some crypto cases had previously attracted public attention, the New York Times’ analysis of thousands of court records and dozens of interviews revealed an unprecedented scale of regulatory rollback this year, benefiting Trump’s industry allies.

All defendants named in the New York Times investigation deny misconduct, with many companies insisting they are only accused of technical violations. Some companies whose cases were dismissed by the SEC have no obvious ties to Trump.

Crypto companies welcomed the “new day” in the industry as described by SEC Chairman Paul S. Atkins, appointed by Trump.

White House Press Secretary Karoline Leavitt dismissed claims of conflicts of interest involving Trump and his family. She stated that Trump’s policies are “fulfilling the president’s promise to make the U.S. the global crypto capital, bringing innovation and economic opportunities to all Americans.”

The Trump administration has rolled back crypto regulation comprehensively, including the Department of Justice shutting down a crypto enforcement division. But this year’s changes at the SEC mark a particularly sharp reversal.

According to the New York Times, during the Biden administration, the SEC averaged more than two crypto cases initiated per month (whether in federal courts or internal legal systems). Even during Trump’s first term, the agency averaged about one case per month, including a high-profile case against Ripple.

In contrast, since Trump’s return to the White House, the SEC has not filed a single crypto case (per the New York Times), although it continues to pursue dozens of other types of lawsuits.

Number of crypto enforcement cases filed by the U.S. SEC under different administrations:

• Trump’s first term: 50
• Biden administration: 105
• Trump’s second term (current): 0

Trump’s newly appointed SEC Chairman Paul S. Atkins argued in a statement that his agency was merely restraining the previous administration’s overenthusiastic approach to crypto. He insisted that the SEC under Biden was using its enforcement powers to craft new policies.

Atkins said, “I have made it clear that we will end the practice of enforcement replacing regulation.”

While crypto companies welcomed Atkins’s “new day” for the industry, SEC lawyers responsible for some of these cases expressed concern about this retreat. They worry that an agency established during the Great Depression to protect investors and oversee markets is now emboldening the crypto industry in ways that could harm consumers and threaten the broader financial system.

Christopher E. Martin, a senior SEC litigation attorney who led a case against a crypto company, chose to retire after the agency’s dismissal of the case this year.

He described the SEC’s broad retreat as “a complete surrender,” adding, “They’ve really thrown investors to the wolves.”

The End of Strict Regulation

At the SEC’s glass-walled headquarters in Washington, the crackdown on crypto was already waning by the end of last year.

Gary Gensler, the Biden-appointed chair at the time, sought to advance multiple crypto investigations but ran out of time.

Trump won re-election, having just announced a crypto venture fund involving himself and his family—“World Liberty Financial”—and vowed to rein in the SEC.

Trump has not always supported crypto. During his first term, he called cryptocurrencies “based on thin air” on Twitter, suggesting they could facilitate drug trafficking and other illegal activities.

His first SEC also took a tough stance, establishing a department dedicated to combating misconduct in online and crypto markets, and filing dozens of cases.

Under Biden, the agency’s efforts increased severalfold. By 2022 (the year of the FTX collapse), the SEC’s crypto division nearly doubled in size to about 50 lawyers and industry experts.

During both presidencies, the SEC believed that since investors could put their life savings into cryptocurrencies, they should understand the risks involved.

But a tricky legal question has always loomed: does the SEC have the authority to bring these cases? The answer depends on whether cryptocurrencies are classified as securities, a modern variation of stocks and other financial instruments.

The SEC argues that many cryptocurrencies are indeed securities, requiring exchanges and brokerages to register with the agency, submit extensive disclosures, and sometimes undergo independent review. Failure to register can lead to prosecution for securities law violations.

The industry counters that most cryptocurrencies are not securities but belong to another asset class, requiring a separate set of rules that the SEC has yet to establish.

Summer Mersinger, CEO of the Blockchain Association, said, “We’re not seeking to be unregulated; we seek clear regulations we can operate under.”

Last year, as Trump shifted from crypto skeptic to advocate, the tide began turning in favor of the industry.

In a July 2024 speech, he promised crypto enthusiasts that the “persecution” of their industry would end, and declared, “On my first day in office, I will fire Gary Gensler.”

The SEC is an independent agency composed of five commissioners appointed by the president, including a chair whose views often reflect the administration that appointed him. Commissioners vote on whether to bring, settle, or dismiss cases, but career enforcement officials handle the actual investigations. This system allows regulatory priorities to shift but traditionally avoids drastic swings driven by political will.

However, after Trump’s second election victory, a sober reality set in within the SEC. Gensler announced his resignation shortly after the election.

The crypto regulatory division, once seen as a career stepping stone, suddenly became a “liability” overnight.

Sources familiar with the matter said that during the presidential transition, enforcement chief Sanjeev Wadhwa, under Gensler, pleaded in internal meetings for the enforcement team to “finish the job the American people paid us to do.” (Speaking anonymously due to internal discussions.)

Nevertheless, some staff members hesitated.

Sources said a senior leader of the crypto team took an unannounced long leave of several weeks and did not respond to emails about cases.

Another senior official refused to sign off on the few crypto cases filed after the election.

Other officials completely halted their work on crypto cases, hindering Gensler’s final efforts.

Victor Suthammanont, who worked at the SEC for ten years and recently served as Gensler’s enforcement advisor, said that staff had persisted through the previous two government transitions.

“But this transition was unlike any I’ve seen,” Suthammanont said, refusing to discuss specific cases. “The atmosphere changed immediately.”

After Trump’s inauguration, there was no turning back. He appointed SEC Republican commissioner Mark T. Uyeda as acting chair until his nominee, Atkins, was confirmed by the Senate.

Uyeda has long opposed the agency’s approach to crypto cases. In a statement to the New York Times, he said Gensler was adopting “a novel theory unsupported by existing law.”

But in a March 2022 speech, Gensler made it clear he held the opposite view. “When a new technology emerges, our existing laws don’t just disappear,” he said.

By early February, Uyeda had marginalized Jorge G. Tenreiro, the litigation lead who had helped oversee most crypto cases.

Tenreiro was reassigned to the Information Technology Department, a move seen within the SEC as a demotion with a dismissive tone.

Without Tenreiro, the agency began to abandon investigations into crypto companies facing potential lawsuits. While some investigations continued, at least 10 companies announced they were no longer under review, including one announced just last week.

“Nothing to Negotiate”

Uyeda soon faced a tougher decision: how to handle ongoing Biden-era lawsuits still pursued in court.

While the SEC often abandons investigations, dismissing ongoing cases is rare and requires approval from the agency’s commissioners.

In one of the most notable crypto cases, the SEC sued Coinbase, the largest U.S. crypto exchange, accusing it of failing to register with the agency. The company vigorously defended itself during Biden’s term, convincing the presiding judge to allow review by a higher court before trial.

Now, with the SEC under Trump’s control, Coinbase is among the first companies seeking to dismiss the case.

Traditionally, the SEC chair’s office stays out of such negotiations, leaving them to career officials overseeing the cases. But an official from Uyeda’s office participated in some negotiations with Coinbase and in meetings with enforcement lawyers.

Grewal, Coinbase’s chief legal officer, said in an interview, “We are very careful to ensure that the acting chair’s office is kept informed of everything happening and all developments.”

Uyeda said his staff’s participation in these meetings was “completely appropriate.”

Initially, the SEC under Uyeda was reluctant to dismiss the case. An insider revealed that their initial proposal to Coinbase was simply to suspend the lawsuit.

But Coinbase rejected the delay.

Subsequently, the SEC proposed a more generous offer: it would dismiss the case on the condition that it retained the right to refile if leadership changed its mind in the future.

Coinbase also refused to settle.

Former federal judge Grewal said, “We are very clear—either they surrender, or we continue the litigation because there’s nothing to negotiate.”

The SEC ultimately relented. At that time, due to the departure of Gensler and another Democratic commissioner, the agency was left with only two Republican commissioners and one Democrat.

Uyeda, without mentioning any specific decision, said, “This type of case should not be continued, especially if the SEC will soon deny its underlying theory.”

But the remaining Democratic commissioner, Caroline Crenshaw, told the press that the agency had given the crypto industry “full deference.”

She said, “They can basically do whatever they want.”

Change in Attitude

Crypto industry officials see Coinbase’s case dismissal as a surrender flag.

Other crypto lawyers sought similar settlements. By the end of May, the SEC had dismissed six more cases.

An analysis of court records by the New York Times highlights how unusual this situation is.

During Biden’s tenure, the SEC did not proactively dismiss a single unresolved crypto case from Trump’s first term, although it did withdraw cases against a deceased defendant and some parts of other cases after unfavorable court rulings.

However, during Trump’s second term, the agency dismissed 33 of the crypto cases inherited from the Biden era, while the dismissal rate for cases in other industries was only 4%.

Although the SEC vowed to continue investigating fraud, it also dismissed lawsuits against Binance. In that case, the SEC accused two related entities of fraudulently misleading customers, claiming they were working to prevent manipulative trading.

The SEC also requested a judge to freeze fraud cases against crypto billionaire Justin Sun and his Tron Foundation, one of four cases the agency was handling for settlement. Officials have not yet announced a resolution.

In summary, the current Trump administration’s SEC inherited 23 crypto-related cases, 21 of which originated during Biden’s presidency, with 2 dating back to Trump’s first term. Of these 23 cases, the agency has taken a retreating approach in 14.

Eight of these defendants established connections with the president or his family shortly before or after the cases were resolved.

For example, Justin Sun purchased $75 million worth of “World Liberty Financial” digital tokens. His company, Tron, did not respond to multiple requests for comment. Court documents state that Sun and Tron claim there is no evidence of fraud or jurisdiction for prosecution by the SEC.

Just weeks before the Coinbase case was dismissed, the company engaged in a $2 billion business deal using “World Liberty Financial” digital currency. This deal is expected to generate tens of millions of dollars annually for the Trump family.

A spokesperson for “World Liberty Financial” said, “There is no connection whatsoever between World Liberty Financial and the U.S. government,” adding that the company “has no influence over administrative policies or decisions.”

Binance stated in a statement that the SEC’s actions are “a product of the ongoing crypto war.”

In March this year, the SEC dropped charges against Cumberland, a crypto trading firm accused of acting as an unregistered securities dealer.

About two months later, its parent company, DRW, invested nearly $100 million in a media company owned by the Trump family.

DRW officials said the investment came after the case was closed and that the dismissal was entirely due to the lack of evidence.

In the Ripple case (which donated nearly $5 million to Trump’s inauguration), the SEC tried to reverse its own efforts.

During Trump’s first term, the SEC accused Ripple of depriving investors of key information when selling its crypto tokens. Last year, after dismissing some SEC charges, a federal judge ordered Ripple to pay a $125 million fine for some securities violations.

However, after Trump’s return to the White House, the SEC sought to reduce the fine to just $50 million. The judge criticized the shift in government attitude and rejected the new settlement.

Ripple argued to the judge that they should receive a lower fine partly because the SEC had taken action to dismiss complaints against other similar crypto companies. Ripple ultimately paid the full fine.

The president’s media company announced in July that they plan to include Ripple’s cryptocurrency in a publicly accessible investment fund.

In an interview, Hester M. Peirce, a Republican commissioner leading the SEC’s new crypto task force, said that the retreat on many cases was a correction of errors. She stated that these cases should never have been brought in the first place.

“I want to say that aggressive actions happened in recent years, bringing cases without legal basis,” she added, believing these cases stifled legitimate innovation.

Peirce said that political or financial considerations did not influence this situation. “We are making decisions based on facts and specific circumstances, not on who knows whom,” she stated.

“Cash Abundant”

Few participants in the crypto industry are closer to Trump than the Winklevoss brothers, Cameron and Tyler.

The twins founded and operate Gemini Trust, which donated to fundraising committees supporting Trump’s re-election and other Republican organizations.

They also funded the construction of the White House ballroom (a private project of the president).

They also supported a new exclusive club in Washington—the “Executive Branch,” partly owned by Trump’s eldest son, Donald Trump Jr.

Additionally, the brothers’ investment firm recently invested in a new crypto mining company called “American Bitcoin”;

Trump’s second son, Eric Trump, is a co-founder and chief strategist of the company, and Donald Trump Jr. is also an investor.

The president has repeatedly praised the twins, describing them as “high-IQ handsome male models.”

At a White House event, Trump said, “They have looks, they have talent, and they have plenty of cash.”

But Gemini Trust has legal troubles.

In December 2020, Gemini and another company, Genesis Global Capital, agreed to offer Gemini customers the opportunity to lend their crypto assets to Genesis. In turn, Genesis would lend these assets to larger participants.

Genesis paid interest to customers, who were promised they could withdraw their assets at any time, while Gemini earned a cut for acting as an intermediary. Gemini promoted this plan as a way for account holders to earn up to 8% interest.

San Diego data scientist Peter Chen said in an interview that he trusted Gemini enough to hand over more than $70,000. “They gave me the impression that they are clean, compliant, and one of the most heavily regulated among all crypto companies,” he said.

Later, at the end of 2022, the bankrupt Genesis froze accounts of 230,000 customers, including Peter Chen’s.

A 73-year-old grandmother pleaded with Gemini to return her life savings of $199,000. “Without that money, I’m done,” she wrote.

Genesis reached a $2 billion settlement with New York in May 2024, and customers eventually got their money back. Gemini also reached its own agreement with the state, which could pay up to $50 million to cover remaining losses if needed. The company denied any misconduct, blamed the disaster on Genesis, and noted that ultimately no customers lost money.

But the SEC also sued both companies, accusing them of unregistered sales of crypto assets. On social media, Tyler Winklevoss called the lawsuit “a fabricated parking ticket.”

Genesis settled, but Gemini fought back until April this year, when the SEC took action to freeze the case to seek a settlement. The agency announced in September that it had reached an agreement with Gemini, pending approval by the commissioners.

The SEC informed the presiding federal judge that the agreement would “fully resolve this litigation.”

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