TL;DR
- The NYT claimed that Trump favored crypto companies linked to donors through a rollback of SEC enforcement, including the freezing or closure of cases.
- Industry leaders, such as Alex Thorn and Paul Grewal, accused the outlet of political bias and stated there is no evidence that the companies had any influence.
- The SEC and the White House rejected the favoritism allegations, defending the regulatory changes as legal and strategic decisions.
A New York Times investigation argues that Donald Trump’s second term prompted a drastic shift in crypto regulation that disproportionately benefited companies connected to donors and political allies, stemming from a rollback of SEC enforcement actions.
The report states that the SEC softened, froze, or abandoned multiple legal proceedings after Trump returned to the White House, which the publication considers unusual due to the scale and speed of the changes.
Cited cases include a federal lawsuit against a firm run by the Winklevoss twins, which reportedly stalled after Trump’s inauguration, and the closure of the lawsuit against Binance initiated under Gary Gensler’s tenure.
The NYT also mentions a substantial reduction in a court-ordered penalty against Ripple Labs, noting that the SEC appears to have retreated in over 60% of cases tied to a single industry within months.
The Crypto Community Defends the Industry’s New Policy Context
However, key figures in the crypto industry strongly criticized the report, accusing the outlet of political bias and of constructing its narrative on a false premise.
Alex Thorn, head of research at Galaxy Digital, rejected the notion that the regulatory shift was due to presidential favoritism and argued that the previous SEC leadership had been exceptionally aggressive and widely criticized by courts, bipartisan lawmakers, and market participants.
Thorn stated that the report ignores the political context of the Biden administration and the influence of officials aligned with Elizabeth Warren, whom he claims pursued a deliberate strategy to exert excessive regulatory pressure on legal industries, including crypto.
He recalled that the Senate, with bipartisan support, voted against SEC policies during the Biden administration, forcing the president himself to veto the measure.
Paul Grewal, chief legal officer at Coinbase, also pushed back, noting that the NYT article itself admitted it found no evidence that the investigated companies influenced their cases through donations or ties to the Trump family, which he said undermines both the headline and the overall narrative.
The SEC and the White House Respond to the NYT
The SEC explicitly denied any political favoritism in its regulatory shift and stated that its decisions were based on legal and policy considerations.
From the White House, press secretary Karoline Leavitt defended Trump’s crypto policies as part of a promise to make the United States a global hub for the sector and create economic opportunities to support its growth.
Paul Atkins, the newly appointed SEC chairman, reaffirmed that the agency will abandon the “regulation by enforcement” approach associated with the previous era, laying the groundwork for a structural change in regulatory strategy
