Crypto stakeholders slam New York Times claims of Trump regulatory favoritism

A New York Times investigation into the Trump administration’s push to change the US Securities and Exchange Commission’s (SEC) stance on crypto regulation has been criticized by industry figures, who accuse the publication of bias. 

The report, published Sunday, argued that President Donald Trump’s second-term approach to crypto regulation has disproportionately benefited companies connected to his donors and political allies, particularly through a rollback of enforcement actions by the SEC.

Alex Thorn, head of firmwide research at Galaxy Digital, questioned the credibility of the newspaper and rejected the suggestion that the regulatory pivot came from a point of presidential favoritism.

In a lengthy statement posted on X, Thorn said, “The whole framing of this new crypto story relies on the false premise that the prior admin’s attack on crypto is totally normal. It wasn’t. The attack was widely rebuked for years by bipartisan members of Congress, by federal courts, by basically anyone that wasn’t part of a small cabal of Elizabeth Warren-aligned officials.” 

Thorn continued to say that “mainstream” liberals policymakers never took up Senator Warren’s cause against crypto, adding: “One time the Dem Senate voted overwhelmingly to overturn an insane SEC policy and Biden was forced to VETO it.”

NYT feature sees some foul SEC crypto regulation change

The Times investigation detailed how the SEC softened or abandoned several enforcement actions after Trump returned to the White House. Among them was a federal lawsuit against a cryptocurrency firm operated by the billionaire Winklevoss twins. 

According to the report, the case had been aggressively pursued before Trump’s inauguration but was effectively frozen once the new administration took office. The news publication also cited the SEC’s decision to drop its lawsuit against Binance after former chair Gary Gensler’s team accused the exchange of violating US securities laws. 

In another example, the agency reduced a court-ordered penalty against Ripple Labs following a years-long legal battle, an effort the Times deemed was an attempt to soften the financial impact on the company, also noting that it is highly unusual for the SEC to retreat from more than 60% of cases from one industry in a span of months. 

However, according to Galaxy’s Thorn, the report ignored the political dynamics of the previous administration and overstated “Trump’s personal interests.” He contended that the Biden administration’s regulatory posture had partisans whose appointments hailed from a supposed political arrangement between former President Joe Biden and Senator Elizabeth Warren during the 2020 campaign.

“These partisans included staffers for regulators who immediately went to Warren-aligned non-profits like Better Markets and the Consumer Federation of America, including entrenched officials inside banking regulators, who have now been exposed for inappropriately targeting legal industries,” Thorn reckoned.

The SEC itself rejected accusations of political favoritism. In a statement, the agency said such considerations “had nothing to do with” its handling of crypto enforcement matters. 

Industry KOLs: Blaming Trump for changing the regulatory chokehold on crypto is insane

In his sentiments on the NYT article, Thorn blasted the Times’ interpretation of the SEC’s regulatory change of heart on crypto, writing: “The idea that the regulatory pivot on crypto over the last year is somehow because of the president’s personal interest, and not because the prior regulatory posture was absolutely INSANE. This type of reporting relies on the readership being uninformed, which, unfortunately, too many are.”

Thorn’s comments were echoed by Paul Grewal, Coinbase’s chief legal officer, who pointed to language within the Times’ own report that appeared to undercut its headline. 

“I do appreciate the reporter’s candor in the comments to the online version of the story: ‘we did not find evidence that the firms had tried to influence the cases against them through donations or business ties to the Trump family.’ It shows the headline and the overall narrative to be even more twisted,” the attorney wrote.

White House Press Secretary Karoline Leavitt, responding to claims from Senator Warren that the Trump family used the Oval Office for insider trading, said the policies were “fulfilling the president’s promise to make the United States the crypto capital of the world and economic opportunity for all Americans.”

Paul Atkins, the newly appointed SEC chairman, reiterated that the agency “would end regulation by enforcement,” a term used to critique the Biden era. 

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