The New York Times conducted the first systematic analysis of thousands of government documents and court records from the last three U.S. administrations, and interviewed more than 20 current and former government officials.

The cryptocurrency company run by the Winklevoss twin billionaires was facing a serious lawsuit in federal court. After Trump returned to the White House, the Securities and Exchange Commission (SEC) took action to freeze the case.

The SEC had previously sued Binance, the world's largest cryptocurrency exchange, but withdrew the lawsuit after the new administration took office.

Furthermore, after years of legal battles with Ripple Labs, the new SEC is attempting to reduce the amount of the court-imposed fine in an effort to mitigate the punishment for the crypto company.

A New York Times investigation found that the SEC's easing of scrutiny of these cases reflects a sweeping shift in the federal government's attitude toward the cryptocurrency industry during President Trump's second term.

It is unprecedented for the SEC to collectively withdraw a batch of lawsuits against a single industry.

However, The New York Times found 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 dismissing cases outright.

The investigation points out that the withdrawal of these cases is particularly unusual. During Trump's presidency, the SEC's withdrawal rate against cryptocurrency companies was far higher than that of other types of cases.

Although the specific details of these crypto lawsuits vary, the companies involved often have one thing in common: they all have financial ties to Trump, who calls himself the "crypto president."

The U.S. Securities and Exchange Commission (SEC), the highest federal agency regulating the U.S. financial market, is no longer actively investigating any company that has a public connection with Trump.

A New York Times investigation found that the SEC has backed down on all companies linked to the Trump family's crypto businesses or that have provided funding for their political endeavors. Currently, the SEC's only remaining crypto-related lawsuits target unknown defendants with no apparent connection to Trump.

Case handling statistics (data as of December 15, 2025):

Cases dismissed directly: 7 cases └ 5 of which involved defendants with public connections to Trump
Mitigation measures were taken in 7 cases, including suspending asset freezes, offering favorable settlements or substantial concessions, and 3 of these cases involved defendants with public connections to Trump.
Maintaining the original stance on the lawsuits: 9 cases | No publicly known connection has been found between any of them and Trump.

In a statement, the SEC said political bias was “unrelated” to their approach to cryptocurrency enforcement, and that the agency’s shift was due to legal and policy reasons, including concerns about its authority to regulate the industry. The SEC noted that long before Trump embraced the crypto industry, its current Republican commissioners fundamentally disagreed on bringing most crypto cases, emphasizing that they “take securities fraud and investor protection seriously.”

There is no indication that the president pressured the agency to go easy on specific crypto companies. Nor have we found evidence that these companies attempted to influence cases against them through donations or business ties with Trump, some of which were established after the SEC policy shift.

However, Trump is both a participant in and a top decision-maker in the crypto industry, and he will profit from companies regulated by his own government. The fact that many companies sued by the SEC have ties to him demonstrates a conflict of interest arising from the president's pursuit of policies that align with his own interests.

At the start of his second term, the White House announced that the president would "stop aggressive enforcement actions and excessive regulation that stifle cryptocurrency innovation."

While the SEC's decision to drop some cryptocurrency cases had already drawn public attention, The New York Times' analysis of thousands of court records and dozens of interviews revealed the unprecedented scale of this year's regulatory backsliding and the enormous benefits it brings to Trump's industry allies.

All the defendants named in the New York Times investigation denied any wrongdoing, with many companies insisting they were only accused of technical violations. Some of the companies whose cases were dropped by the agency had no apparent connection to the president.

Crypto companies welcomed what Trump’s newly appointed SEC chairman, Paul S. Atkins, called a “new day” for the industry.

White House Press Secretary Karoline Leavitt dismissed claims of any conflict of interest involving Trump or his family. She stated that Trump's policy is "to deliver on the president's promise to make America the global cryptocurrency capital, bringing innovation and economic opportunity to all Americans."

The Trump administration had broadly relaxed crypto regulations, including the closure of a crypto enforcement division within the Department of Justice. But this year’s changes at the SEC mark a particularly sharp reversal.

According to an analysis by The New York Times, during the Biden administration, the SEC filed an average of more than two crypto cases per month (both in federal court and within its internal legal system). Even during Trump's first term, the agency filed an average of about one case per month, including the high-profile case against Ripple.

In contrast, the SEC has not filed a single crypto case (as defined by The New York Times) since Trump returned to the White House, although it continues to file dozens of lawsuits against other types of defendants.

Number of cryptocurrency lawsuits filed by the U.S. SEC under different administrations:

Trump's first term: 50 cases
Biden administration: 105 cases
Trump's second term (current term): 0 cases

In a statement, Trump's newly appointed SEC Chairman Paul S. Atkins argued that his agency was merely restraining the previous administration's excessive enthusiasm for the crypto industry. He insisted that the Biden-era SEC would use its enforcement powers to formulate new policies.

Atkins said, "I have made it clear that we will end the practice of substituting enforcement for regulation."

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

Christopher E. Martin was a senior litigation attorney at the SEC who led a case against a crypto company. He chose to retire after the agency withdrew its lawsuit this year.

He described the SEC's broad concessions as a "complete surrender," adding, "They really threw investors to the wolves."

The end of tough regulation

Inside the SEC’s glass-walled Washington headquarters, the agency’s crackdown on cryptocurrencies had reached its limit by the end of last year.

Then-chairman Gary Gensler (appointed by the Biden administration) wanted to push forward with several cryptocurrency investigations, but he ran out of time.

Trump won re-election after announcing a cryptocurrency venture capital firm, World Liberty Financial, involving himself and his family, and vowing to hold the SEC accountable.

Trump has not always been a supporter of crypto. During his first term, he tweeted that cryptocurrencies are based on “thin air” and could fuel drug trafficking and other illicit activities.

His first term at the SEC also saw a tough stance. The agency established a dedicated division to combat online and cryptocurrency misconduct and filed dozens of cases.

During Biden's presidency, the agency's efforts were amplified several times over. By 2022 (the year the mega-crypto exchange FTX collapsed), the SEC's cryptocurrency division had nearly doubled in size, reaching approximately 50 lawyers and industry experts.

During the terms of both presidents, the SEC believed that since investors were willing to invest their life savings in cryptocurrencies, they should be aware of the risks involved.

But a thorny legal question has always loomed over the agency: does it actually have the authority to bring these cases? The answer depends on whether cryptocurrencies are securities, a modern variant of stocks and other financial instruments.

The SEC argues that many cryptocurrencies are essentially securities, therefore companies such as crypto exchanges and brokers must register with the agency, file extensive public disclosures, and, in some cases, undergo independent scrutiny. Failure to register allows the agency to prosecute them for violating securities laws.

The industry countered that most cryptocurrencies are not securities, but rather another asset class that requires a set of specific rules that the agency has not yet established.

"We are not looking for a lack of regulation; we are looking for clear regulation on which we can operate," said Summer Mersinger, CEO of the Blockchain Association.

Last year, the situation began to shift in the crypto industry as Trump went from being a cryptocurrency skeptic to an evangelist.

In a speech in July 2024, he promised crypto enthusiasts that the “persecution” against their industry would stop and said, “On my first day in office, I will fire Gary Jensler.”

The SEC is an independent body comprised of five commissioners appointed by the president, including a chairman whose views often reflect the position of the administration that appointed him. Commissioners vote on whether to initiate, settle, or dismiss cases, but career law enforcement officials are responsible for the actual investigations. This system allows for shifts in regulatory focus but traditionally avoids dramatic swings in political will.

But after Trump's second election victory, a sobering sense of reality permeated the SEC. Jensler announced his resignation shortly after the election.

Cryptocurrency regulators, once seen as a career stepping stone, suddenly became "liabilities" overnight.

According to sources familiar with the matter, during the presidential transition, Sanjay Wadwa, the head of law enforcement under Gensler, pleaded with the law enforcement team in an internal meeting to "do the job that the people have paid us to do." (The sources requested anonymity due to the nature of the meeting.)

Nevertheless, some staff members still had second thoughts.

According to sources, a senior leader on the crypto team took an unannounced, multi-week leave and did not respond to emails about the case.

Another senior official declined to sign a document on one of the few crypto cases brought by the agency after the election.

Other officials completely halted their work on the encryption cases, hindering Jensler's final efforts.

Victor Suthammanont, who has worked at the agency for ten years and most recently served as a law enforcement advisor to Gensler, said the staff had persevered through the previous two changes of government.

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

Once Trump was sworn in, there was no turning back. He appointed Mark T. Uyeda, one of the Republican commissioners of the SEC, as acting chairman until the president's nominee, Atkins, was confirmed by the Senate.

Uda has long opposed the agency's handling of crypto cases. In a statement to The New York Times, he said that Jensler was employing novel theories that were "not supported by existing law."

But in a 2022 speech, Gensler made it clear that he held the opposite view. “When a new technology emerges, our existing laws do not disappear,” he said.

By early February, Uda had marginalized Jorge G. Tenero, the litigation manager who had previously assisted in leading the encryption department and overseen most cases.

Tenero's reassignment to the information technology department was seen within the SEC as a demotion with demeaning implications.

Without Tenero, the agency has begun to drop investigations into crypto companies facing potential lawsuits. While some investigations are still ongoing, at least 10 companies have announced they are no longer under scrutiny, including one that announced just last week.

There's nothing to negotiate.

Uda soon faced an even tougher decision: how to handle the Biden-era lawsuit that the agency was still pursuing in court.

While the SEC frequently abandons investigations, dropping an ongoing case is rare and requires approval from a commissioner of the agency.

In one of the most high-profile crypto cases, the SEC sued Coinbase, the largest U.S. cryptocurrency exchange, alleging that it failed to register with the agency. The company fought aggressively during Biden's presidency, persuading the presiding judge to allow a higher court to review the case before trial.

Now that the SEC has fallen into the hands of the Trump administration, Coinbase is one of the first companies to seek to withdraw its case.

Traditionally, the SEC Chairman's office would remain uninvolved, leaving such negotiations to career officials overseeing the case. However, an official from Uda's office participated in some of the negotiations with Coinbase, as well as meetings with enforcement lawyers.

"We are very careful to ensure that the acting chairman's office is informed of everything that is happening and is fully informed," said Coinbase's chief legal officer, Paul Grewal, in an interview.

Uda stated that it was "perfectly appropriate" for his staff to attend these meetings.

The SEC, under Uda's leadership, was initially reluctant to drop the case. An insider revealed that their initial offer to Coinbase was simply to suspend the proceedings.

But Coinbase refused the extension.

Subsequently, the SEC made a more generous offer: it would drop the case on the condition that the agency retains the power to resume the litigation in the future should leadership change its mind.

Coinbase also refused to settle the matter.

"We were very clear that either they surrendered or we continued the litigation, because we had nothing to negotiate," said Grower, a former federal judge.

The SEC eventually conceded. At that time, due to the departures of Jensler and another Democratic commissioner, the agency was left with only two Republican commissioners and one Democratic commissioner.

Without mentioning any specific decision, Uda stated, "These kinds of cases should not continue, especially if the SEC denies its underlying theories in the near future."

However, the remaining Democratic commissioner, Caroline Crenshaw, stated in an interview that the agency has already given the cryptocurrency industry comprehensive preferential treatment.

She said, "They can actually do whatever they want."

Attitude change

The crypto industry views Coinbase's withdrawal of the case as a white flag of surrender.

Lawyers for other crypto companies sought similar settlements. By the end of May, the agency had dropped six more cases.

The New York Times' analysis of court records highlights the unusual nature of this situation.

During Biden's presidency, the SEC did not proactively dismiss a single pending crypto case from Trump's first term, although it did dismiss cases against a deceased defendant and parts of another case after an unfavorable judge ruling.

However, during Trump's second term, the agency revoked 33% of the crypto cases it inherited from the Biden era. For cases in other sectors, the revocation rate was only 4%.

Despite the SEC's vow to continue investigating the fraud, it has dropped its lawsuit against Binance. In that case, the SEC accused the two entities of fraudulently misleading customers by claiming they were working to prevent manipulative trading.

The SEC has also asked a judge to freeze the fraud case against crypto billionaire Justin Sun and his Tron Foundation, one of four cases the agency is handling to reach a settlement. Agency officials have not yet announced a resolution to the case.

In summary, the Trump administration inherited 23 cryptocurrency-related cases from the SEC, 21 of which dated back to the Biden administration and the other two to Trump's first term. Of these 23 cases, the agency has already made concessions on 14.

In eight of these cases, the defendants had established contact with the president or his family before or shortly after the cases were resolved.

For example, Justin Sun purchased $75 million worth of "World Free Finance" digital tokens. His company, Tron, did not respond to multiple requests for comment. In court documents, Sun and Tron stated that the SEC lacked evidence of fraud and jurisdiction to prosecute.

Just weeks before the Binance case was dropped, the company was involved in a $2 billion business deal that used World Free Finance's digital currency. This deal was expected to bring the Trump family tens of millions of dollars in revenue annually.

A spokesperson for World Freedom Finance stated, "World Freedom Finance has absolutely no affiliation with the U.S. government," adding that the company "has no influence over the policies or decisions of the executive branch."

Binance stated in a press release that the SEC's actions against it were "a product of a crypto war."

In March of this year, the SEC dropped a case alleging that crypto trading firm Cumberland acted as an unregistered securities dealer.

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

DRW officials stated that the company only received the investment opportunity after the case concluded, and that the withdrawal of the case was entirely due to the false allegations.

In the case against Ripple (which donated nearly $5 million to Trump’s inauguration), the SEC is attempting to overturn its own efforts.

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

However, after Trump returned to the White House, the SEC attempted to reduce the fine to just $50 million. The judge criticized the government's change of 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 withdraw complaints against other similar crypto companies. Ripple ultimately paid the full fine.

The president’s media company said in July that it planned to include Ripple’s cryptocurrency in a publicly accessible investment fund.

In an interview, Republican Commissioner Hester M. Peirce, who leads the SEC's newly formed cryptography task force, said that backing down on many cases is correcting a mistake. She said these cases should never have been brought up in the first place.

“I would say that the radical actions that have occurred in the last few years have been the filing of cases that we have no legal basis for,” she added, adding that she believes these cases stifle legitimate innovation.

Pierce stated that political or financial considerations had no influence on the situation. She said, "We are making decisions based on facts and specific circumstances, not on 'who this person knows'."

"Ample cash reserves"

Few figures in the crypto industry are closer to Trump than the Taylor and Winklevoss brothers.

The twins founded and run GeminiTrust, and they donate to fundraising committees that support Trump's re-election campaign and other Republican organizations.

They also provided funding for the construction of the White House ballroom (a private project of the president).

They also backed a new exclusive club in Washington called the “Executive Branch,” which is partly owned by the president’s eldest son, Donald Trump Jr.

In addition, the brothers' investment company recently invested in a new crypto mining company called "American Bitcoin";

Eric Trump, Trump's second son, is the company's co-founder and chief strategy officer, and Donald Trump Jr. is also an investor.

The president has repeatedly praised the twins, describing them as highly intelligent male models.

"They have good looks, they have talent, and they have plenty of cash," Trump said at a White House event.

But Gemini Trust is facing legal trouble.

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

Genesis pays interest to its clients, who are promised the ability to withdraw their assets at any time, while Gemini receives a cut as an intermediary. Gemini advertises the program as a way for account holders to earn up to 8% interest.

In an interview, San Diego-based data scientist Peter Chen said he trusted Gemini enough to deposit over $70,000. He stated, "They gave me the impression of being clean, rule-abiding, and one of the most regulated of all crypto companies."

Then, at the end of 2022, Genesis, facing bankruptcy, froze the accounts of 230,000 customers, including Peter Chen's account.

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

In May 2024, Genesis reached a $2 billion settlement with New York, and customers finally got their money back. Gemini also reached its own agreement with the state, agreeing to pay up to $50 million to cover any remaining losses if necessary. It denied any wrongdoing, blamed the disaster on Genesis, and stated that ultimately no customers lost money.

However, the SEC also sued both companies, accusing them of selling cryptocurrency without registration. On social media, Tyler Winklevoss called the lawsuit "a fabricated parking ticket."

Genesis reached a settlement, but Gemini continued to fight it until April of this year, when the SEC took action to freeze the case in pursuit of a settlement. The agency disclosed in September that it had reached an agreement with Gemini, but it still required committee approval.

The SEC informed the presiding federal judge that the agreement would "completely resolve this lawsuit."

Source: The New York Times, Original title: The SEC Was Tough on Crypto. It Pulled Back After Trump Returned to Office

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