Crypto industry leaders fiercely reject New York Times investigation alleging Trump favoritism, arguing the report ignores years of Biden-era regulatory overreach that faced bipartisan congressional opposition and multiple federal court rebukes.
A New York Times investigation claiming Trump administration favoritism toward crypto firms has sparked fierce backlash from industry leaders who say the report ignores years of regulatory overreach under Biden. The controversy centers on SEC enforcement rollbacks affecting over 60 percent of inherited cases.
The Times published findings Sunday alleging President Trump's regulatory shift disproportionately benefited companies tied to donors and political allies. The report documented how SEC enforcement actions against firms like Gemini, Binance, and Ripple Labs were frozen, dropped, or reduced after Trump returned to office. Of 23 inherited crypto cases, regulators pulled back from 14, with eight involving defendants who later formed ties to Trump or his family.
Galaxy Digital's Alex Thorn rejected the premise entirely. According to Thorn, on X, the framing relies on a false assumption that Biden's crypto crackdown was normal. He emphasized that the prior administration's regulatory stance faced bipartisan congressional opposition and federal court rebukes. Thorn pointed to a Senate vote that overwhelmingly moved to overturn an SEC policy, forcing Biden to veto it. These officials included Elizabeth Warren-aligned appointees who previously worked directly for the senator or secured her approval.
Crypto Defenders Challenge Narrative Foundation
The attack on the industry was not mainstream Democratic policy, Thorn argued. He described a small group of partisans who targeted legal industries through banking regulators and later moved to Warren-aligned nonprofits like Better Markets.
According to Thorn, on X, judges criticized prior SEC leadership for failing to follow faithful allegiance to the law, finding actions arbitrary and capricious, and even fining the agency for lying to the court. The idea that Trump's personal interest drove regulatory change ignores four years of partisan attacks, he stated.
Paul Grewal of Coinbase highlighted contradictions within the Times report itself. As Grewal tweeted on X, the reporter admitted in online comments that investigators found no evidence firms influenced cases through donations or Trump family business ties. There was no indication the president or White House pressured the SEC regarding specific companies. Grewal said this candor undermines both the headline and overall narrative, exposing the twisted framing.
Ripple CEO Brad Garlinghouse called the piece another hit job filled with half-truths and omissions. As Garlinghouse tweeted on X, the Times failed to mention judges who criticized SEC leadership or found agency actions arbitrary. He questioned why the publication never ran headlines during Biden's term calling out what he termed an illegal attack on the industry. Garlinghouse described the coverage as advancing a false narrative rather than journalism.
SEC Denies Political Interference Claims
The SEC rejected favoritism accusations outright. The agency stated political considerations had nothing to do with handling enforcement matters. Officials attributed case rollbacks to legal and policy reasoning under new leadership. White House Press Secretary Karoline Leavitt defended the approach as fulfilling Trump's promise to establish America as the crypto capital and drive economic opportunity.
The Times investigation found dismissal rates for crypto cases far exceeded other industries. During the same period, roughly four percent of non-crypto inherited cases were dropped compared to over 30 percent of digital asset enforcement actions. The SEC continued pursuing standard enforcement in other sectors while pulling back dramatically on blockchain companies.
Paul Atkins, the newly appointed SEC chairman, confirmed the agency would end regulation by enforcement. This approach characterized the Biden era, where firms faced legal action without clear rule frameworks. Summer Mersinger of the Blockchain Association stated the industry seeks clear regulations to operate under, not an absence of oversight.
Cases involving the Winklevoss twins' Gemini exchange stalled after Trump took office. The SEC had sued both Gemini and Genesis for allegedly selling unregistered securities. Genesis settled for $2 billion with New York in May 2024, while Gemini continued fighting until April when the SEC moved to freeze the case. Tyler Winklevoss dismissed the lawsuit as a fabricated parking ticket on social media. The agency disclosed reaching agreement with Gemini in September, pending commissioner votes.
Binance faced similar relief. Former Chair Gary Gensler's team had accused the exchange of violating securities laws before the administration change led to case abandonment. Ripple Labs saw the SEC attempt reducing a court-ordered $125 million penalty to $50 million, though the judge rejected the reduction citing the agency's sudden reversal.
Thorn emphasized that reporting relying on uninformed readership promotes what he termed crypto dementia. The Galaxy researcher argued the Times depends on readers lacking context about years of aggressive enforcement that courts and lawmakers widely criticized. Federal judges issued multiple rulings against SEC overreach during the Biden administration, establishing legal precedent that the prior approach violated administrative law principles.
The controversy reflects broader tensions between traditional finance regulation and emerging digital asset frameworks. Industry participants maintain the Biden SEC operated outside statutory authority by classifying most cryptocurrencies as securities without formal rulemaking. Trump's July 2024 speech promised ending persecution of the sector and firing Gensler on day one of his return to office.
Warren-aligned officials included consequential Biden appointees and staffers who moved to advocacy groups after government service. Banking regulators faced exposure for inappropriately targeting legal industries through informal guidance rather than formal rules. This pattern extended beyond the SEC to include banking agencies that discouraged financial institutions from serving crypto clients.
The eight cases involving Trump-connected defendants included founder Justin Sun, whose company Tron later linked to Trump family digital assets. Lawyers representing presidential business interests denied any connection between government decisions and private sector relationships. The Times found no active SEC pursuit of any company with public Trump connections.
Non-crypto enforcement maintained normal patterns throughout the transition period. The dramatic divergence in case handling rates between digital assets and traditional finance raised questions about selective treatment. The SEC inherited enforcement actions across multiple industries but applied different standards to blockchain companies versus other sectors.
Industry leaders argue the regulatory pivot reflects correcting illegal overreach rather than political favoritism. The departure from Biden-era enforcement follows court decisions establishing that agencies cannot regulate through enforcement actions without proper rulemaking procedures. This administrative law principle limits regulator discretion when existing statutes don't clearly cover emerging technologies.
Key Takeaways:
- SEC dropped 14 of 23 inherited crypto cases, with eight involving Trump-connected firms after return to office
- Galaxy's Thorn says Biden administration pursued partisan attack on legal industry through Warren-aligned officials
- Coinbase's Grewal notes NYT reporters admitted finding no evidence of presidential pressure or donation influence
#Crypto #SECEnforcement #TrumpCrypto #RegulatoryPolicy #DigitalAssets
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Crypto Leaders Blast NYT Trump Report Bias
Industry executives reject NYT investigation alleging Trump favoritism, citing Biden-era regulatory overreach and bipartisan court rebukes.