Crypto Craziness

We’ve come a long way from the days when Donald Trump called cryptocurrency a “scam.”

The president who courted crypto investors during the 2024 campaign, raked in millions from crypto interests for his inauguration, and has launched a number of crypto business endeavors that have earned him an estimated $1 billion is poised to sign into law major legislation backed by the crypto industry.

This week, the House of Representatives is expected to pass the so-called GENIUS Act, an acronym for “Guiding and Establishing National Innovation for U.S. Stablecoins,” which was passed by the Senate last month. This legislation will create a weak regulatory framework for the type of cryptocurrency products known as stablecoins. It has been criticized for dismantling the federal safeguards that have long protected consumers and investors.

But new industry-friendly legislation isn’t the only thing that Trump’s Washington has delivered for crypto interests.

Based on an Issue One review of news articles, here are 12 times during Trump’s second term that Trump and his administration have generally made life easier for the controversial industry that has invested heavily in the political influence game. These actions include issuing multiple pardons for high-profile crypto figures, and multiple enforcement cases being dropped against crypto interests, many of which gave significant sums to Trump’s political committees. Even more troubling, in multiple cases, significant sums of money have flowed directly into the pockets of Trump and his family.

“Any example of pay-to-play politics is appalling, but the ways the Trump administration and crypto interests are working in tandem erode the very foundations of trust in government,” said Issue One Founder and CEO Nick Penniman. “Crypto isn’t just the latest player in Washington’s influence game. The crypto industry has an inside man in the White House who is personally profiting from lax enforcement and telegraphing to others that his administration will look the other way.”

Trump Pardons Silk Road Founder Ross Ulbricht

On his second day in office in January, Trump pardoned Ross Ulbricht, the creator of the online black market platform known as the Silk Road, which helped popularize the use of cryptocurrency by being one of the first venues where Bitcoin was used. Despite being previously sentenced to life in prison without parole for distributing more than $200 million worth of illegal drugs and other illicit goods, Ulbricht became a hero for crypto enthusiasts, who, for years, have been calling for his release.

Trump Pardons Operator of Crypto Exchange BitMEX

In March, Trump issued what was likely the first-ever presidential pardon of a corporation — pardoning HDR Global Trading, the operator of the crypto exchange BitMEX, and helping the company avoid a $100 million fine for violating an anti-money laundering law. That same day, Trump pardoned four BitMEX executives who had previously pleaded guilty to failing to implement an anti-money laundering program compliant with the Bank Secrecy Act.

SEC Announces More Lax Approach to Crypto

In February, the Securities and Exchange Commission (SEC) made multiple announcements that it was taking a new approach to regulating crypto. In one announcement, the SEC declared a shift in its approach to the crypto industry, replacing one enforcement unit with a smaller team that would only prioritize fraud-related misconduct, focusing on activities of drug cartels and terrorist groups. The previous unit had also been responsible for enforcing non-fraud misconduct — such as violations of securities laws — which the new unit will no longer do. A few days later, the SEC announced that it would not regulate so-called “memecoins,” a type of cryptocurrency product with little value beyond that driven by speculative investors. By asserting that memecoins are “akin to collectibles” and not subject to federal securities regulations, the SEC gave memecoin creators — including the president and first lady — free reign with their memecoin products.

SEC Pauses Fraud Case Against Chinese Billionaire Who Invested Massive Sums into Trump’s Crypto Ventures

In 2023, the SEC accused Chinese-born crypto billionaire Justin Sun and his companies of fraudulently manipulating a cryptocurrency market and selling unregistered securities. Yet after Trump won the 2024 presidential election, Sun took a new approach to currying favor in Washington. He purchased $75 million worth of crypto tokens from the Trump family’s World Liberty Financial company — transactions that reportedly earned the president more than $50 million and led to Sun joining World Liberty Financial as an advisor. By February, the SEC had abruptly paused its civil fraud case against Sun. And by May, Sun — who for years avoided travel to the United States due to fears of arrest — separately invested another $18.5 million into Trump’s memecoin, earning him a coveted spot at a special dinner with Trump and a tour of the White House. One company that researches crypto transactions estimates that half of all illegal crypto activity takes place on the crypto network Sun founded.

SEC Ends Lawsuit Against Crypto Exchange Coinbase

In February, the SEC ended a lawsuit against Coinbase, a crypto exchange that donated $1 million to Trump’s inaugural committee and whose founder donated another $1 million. This ended the SEC’s fight to have Coinbase regulated as a securities exchange, which would require it to comply with investor protection rules.

SEC Drops Lawsuit Against Crypto Exchange Binance

In May, the SEC dismissed a lawsuit against crypto exchange Binance and its founder, Changpeng Zhao, shortly after Binance reportedly entered talks with representatives of Trump’s family to explore investing in Binance’s U.S. arm. The lawsuit alleged that Binance — which had previously pleaded guilty in a separate case to violating anti-money-laundering laws — had been operating unregistered security exchanges, misrepresenting trading controls, and pooling together investor and company assets. A deal between the Trump family and Binance, which pleaded guilty to violating U.S. money laundering rules in 2023, would allow the Trumps to gain a stake in a competitor to Coinbase, and end Binance’s exile from the U.S. market.

SEC Ends Investigation into Crypto-Supporting Financial Services Company Robinhood

In February, the SEC ended an investigation into Robinhood, a financial services company that supports crypto trading and which donated $2 million to Trump’s inaugural committee. During President Joe Biden’s time in office, Robinhood had been notified that it was being investigated for failing to register certain securities.

SEC Seeks Reduced Settlement in Case Against Crypto Firm Ripple Labs

In May, the SEC filed to seek a reduced settlement in a case against crypto firm Ripple Labs, which donated nearly $4.9 million to Trump’s inauguration and whose CEO attended a private dinner with Trump in January. This sum ranked as the second-largest donation to Trump’s inauguration. Ripple Labs had been found liable for the illegal sales of $728 million worth of unregistered securities. As part of the deal, the SEC has attempted to return $75 million of a $125 million fine previously imposed on Ripple Labs — though federal judges have twice told the SEC it does not have the authority to reduce this penalty.

SEC Drops Case Against Crypto Exchange Kraken

In March, the SEC dropped a case against crypto exchange Kraken and its parent company Payward Inc., which donated $1 million to Trump’s inauguration. Under the Biden administration, the SEC had accused Kraken, in November 2023, of operating an unregistered securities exchange, broker, dealer, and clearing agency. The SEC alleged that the platform’s crypto trading services violated multiple provisions of U.S. securities laws.

SEC Closes Investigation into Crypto Exchange Crypto.com

In March, the SEC informed crypto exchange Crypto.com that a probe into the company was being dropped with no enforcement action against it. Around the same time, the Trump Media & Technology Group — the parent company of Trump’s Truth Social social media platform — announced a deal with Crypto.com to launch a series of crypto exchange-traded funds (ETFs) and related products under a new Trump Media brand focused on financial services, Truth.Fi.

DOJ Disbands Crypto Enforcement Team

In April, the Department of Justice disbanded its National Cryptocurrency Enforcement Team, a team of prosecutors focused on digital assets-related crimes. The new approach means that the DOJ will cease targeting virtual currency exchanges and other crypto service providers for the actions of their end-users or for “unwitting” violations of regulations, except in cases involving fraud or unlawful conduct by cartels, terrorists, or similar organizations.

Federal Reserve Pulls Back Supervisory Guidance About Crypto

In April, the Federal Reserve rescinded supervisory letters from 2022 and 2023 that warned banks about the risks of cryptocurrencies and required them to seek approval from regulators before dabbling in crypto. The pullback of these supervisory guidelines under the Trump administration makes it easier for banks to engage in crypto activities.

Ryan Jankelowitz contributed to this report.