Crypto cronies: SEC looks the other way, especially for Trump pals

It’s not every day the U.S. Securities and Exchange Commission (SEC) takes a step back and says, “You know what, maybe we’ll just let this one slide.” But that’s exactly what happened with crypto cases after President Donald Trump returned to the White House, according to a New York Times investigation.

The regulatory agency, once notorious for its tough stance on cryptocurrency firms, suddenly softened its approach, dropping or pausing more than 60% of its crypto cases—many of which had connections to the former president.

Take, for example, the case against Binance, the world’s largest crypto exchange. The SEC, which had initially sued the company, unexpectedly dropped the case altogether once Trump’s second term kicked off.

Similarly, a long-running battle with Ripple Labs, which included a hefty court-ordered penalty, saw the SEC attempt to reduce the fine, much to the confusion of industry observers.

But it’s not just about the cases that got dropped. As the SEC rolled back enforcement on dozens of crypto firms, a pattern emerged—many of those firms had ties to Trump’s business ventures or political donors.

In fact, it became almost impossible to ignore the fact that some of the loudest voices in the crypto world had donated to Trump’s causes or had financial dealings with his family.

The SEC claimed that their move wasn’t politically motivated. Instead, they argued that it was a shift in regulatory approach and legal strategy.

Trump’s SEC blames the previous administration for its “overreach.”

Critics, however, aren’t buying it, considering how the most eyebrow-raising dismissals involved the Winklevoss twins, who’ve long been known for their connections to Trump.

The pair, who run Gemini Trust, made donations to Trump’s fundraising efforts, and even contributed to the construction of a White House ballroom.

Their ties to Trump’s world didn’t end there—they’ve also invested in ventures with Trump’s sons, Eric and Donald Jr.

2025: Crypto bros got what they wanted—sort of

Firms once staring down the barrel of regulatory scrutiny are now breathing a little easier, as the SEC shifts gears from courtroom battles to more relaxed enforcement. Even Coinbase, the largest U.S.-based crypto exchange, scored a win when the SEC dropped its case against them, after a long back-and-forth that saw the exchange push back on the regulator’s demands.

Of course, not everyone in the crypto crowd is thrilled. After all, it hasn’t been a good look for crypto ever since January 20 when Trump got into office.

As SkyBridge founder Anthony Scaramucci puts it :

Trump being Trump, he launches two meme coins on the eve of the election. One for him and one for Melania, right? So meme coins again just are like gambling tokens. They have very little value. These meme coins go up in value. He takes [$500] or $600 million out for himself and his family. And these meme coins over the last seven or eight months have crashed in value… It’s just going to be a huge problem for the industry because if you have a president that’s running a self-interested memecoin, which is a worthless token, he’s susceptible to grift and graft. He’s susceptible to people buying the token and then trying to influence him. And lo and behold, Trump says, “Yeah, go buy my token or make a $5 million donation to me and I’ll meet you crypto people at my Virginia Country Club.” And so what this did actually is it soured the industry. It had the opposite effect.

Still, the crypto world seems to have found itself with a president who not only supports their causes but might just have their backs in the courtroom as well.

Furthermore

Meanwhile, the SEC has begun a formal review of Nasdaq’s proposal to list and trade tokenized securities, a move that could significantly impact the integration of blockchain technology in traditional financial markets.

Nasdaq seeks approval to offer tokenized stocks and exchange-traded products alongside conventional shares on the same order book, maintaining existing shareholder rights and leveraging blockchain for operational efficiency.

The SEC is soliciting public feedback on the proposal to determine how digital assets can fit within current market structures.

While some industry groups support the move for its potential efficiency gains, others, including Ondo Finance and Cboe Global Markets, have urged the SEC to wait for clearer guidance from the Depository Trust and Clearing Corporation (DTCC) on settlement procedures for tokenized assets.

The SEC’s review process marks an important step in evaluating blockchain’s role in financial markets.

Separately, the agency issued guidance that covers how investors can store and access digital assets through crypto wallets, which hold private keys rather than the assets themselves.

The bulletin distinguishes between hot wallets connected to the internet and cold wallets stored on physical devices.

The SEC emphasized that investors must choose between managing their own wallets or relying on third-party custodians.