Federal officials have declared that the so-called Memecoin will not be subject to strict surveillance.
A series of investigations from major cryptocurrency companies have been suspended.
The Securities and Exchange Commission has then agreed to suspend fraud cases against top crypto entrepreneurs.
More than a month after President Trump's inauguration, US regulators have almost completely dismantled longstanding government crackdowns on the crypto industry, a precarious sector full of fraud, fraud and theft.
Regulators follow Trump's campaign promises last year. He sold his own digital currency to the public, seeking donations from deep-pocketed crypto investors.
However, few people in the crypto industry expected to notch so many victories very quickly.
Last week, the SEC agreed to stop lawsuits against Coinbase, the largest US crypto company. In a rapid and continuous period, crypto companies Gemini, Opensey and top executives at UNISWAP Labs announced that government agencies have stopped investigating companies. An executive at Consensys, another major crypto company, said Thursday that the SEC agreed to withdraw a lawsuit targeting one of the company's popular products.
“This marks another milestone until the end of the war with code,” Gemini founder Cameron Winclevos wrote in X on Wednesday. “I'm happy to be able to turn the pages here.”
The rapid fire legal move amounted to a surprising reversal by normally cautious regulators, reluctant to abandon the ongoing litigation. Case-by-case, the SEC, away from the ambitious legal campaign led by the Biden administration, categorizes almost all digital coins as securities and responds to the same strict rules that control stocks and bonds traded on Wall Street.
The reversal “slashes the reliability, integrity and reputation of the SEC and sends a message that it is a political organisation that acts on the latest elections,” said Dennis Kelleher, president of Better Markets, a nonprofit that promotes strong regulations.
According to government ethics experts, some of the agency's actions are poised to directly benefit Trump or his business partners, creating conflicts of interest with almost precedent in American history.
That was clear on Thursday when the SEC said it would not exercise regulators against memokine, a dangerous type of cryptocurrency linked to celebrities and online jokes. A few days before taking office, Trump created his own memo coin $ Trump.
This week, the SEC also asked federal judges to suspend a major fraud case against Justin San, a crypto entrepreneur who invested tens of millions of dollars in another of the Trump family's crypto ventures. The judge approved the request.
A representative for Sun declined to comment. Mark Ueda, acting chairman of the SEC, said in a statement Thursday that the agency needs to “revise its approach and develop crypto policy in a more transparent way.”
Under the Biden administration, the SEC's enforcement campaign was led by its chairman, Gary Gensler. Gensler has filed lawsuits against a number of top companies, including Crypto Exchanges Coinbase, Binance and Kraken.
Trump vowed to end the crackdown. To replace SEC's Jensler, he appointed Paul Atkins, a securities lawyer with close ties to the crypto industry. He also tapped venture investor and crypto enthusiast David Sachs to serve as “White House AI and Crypto Czar.”
In his first week of office, Trump signed an executive order laying the basis for an overhaul of federal government's crypto regulations. After that, the SEC began acting.
Last week, the agency agreed to stop the lawsuit against Coinbase, a case in which the exchange alleges that it is selling unregistered securities without imposing financial penalties on the company's full victory.
In its lawsuit against Binance, the SEC requested a 60-day suspension, citing efforts to “promote potential resolution of this case.” The agency took more decisive steps in several other cases, ending its investigation into well-known companies such as the Crypto Exchange, Gemini, and others, which were founded by Cameron and Tyler Winclevos.
Without a doubt, the agency's most important action this week was about Mr. Sun.
The founder of a Chinese-born crypto platform called Tron, San is the most colorful person in the crypto world. Last year he spent $6.2 million on experimental artwork. The banana was taped to the wall. He began eating bananas.
In 2023, the SEC filed a lawsuit against Sun, accusing him of fraudulent manipulating the prices of his cryptocurrency. “The Sun and others used the old playbooks to mislead investors and harm them,” an agency official said. San denied the allegations.
Sun is approaching Trump's inner circle. He spent $30 million last year buying cryptocurrency released by the world's Liberty Financial.
Now it appears that Sun is approaching solving his legal issues in the United States. In court filings Wednesday, the SEC requested a suspension of the case to both sides “consider potential resolutions.”
