The Rule of Law, Selectively Applied

The Supreme Court ruled 9-0 that financial wrongdoers must give back what they stole. The Trump administration argued for that outcome. It also spent 2025 pardoning the people it applied to.

On Thursday morning, the Supreme Court handed down a unanimous ruling in Sripetch v. SEC, affirming the government's broad authority to pursue disgorgement — the legal mechanism by which regulators strip financial wrongdoers of their illegal profits and return them to victims. All nine justices agreed. The Trump administration, which had defended the SEC's position in the case, welcomed the outcome. It was, by any conventional measure, a victory for financial accountability.

It was also, by any honest accounting of the past fourteen months, a considerable act of institutional theater.

Disgorgement is not an abstract legal concept. It is the principle that you cannot keep money you obtained through fraud. It holds that the law's purpose is not merely to punish wrongdoing after the fact but to ensure that wrongdoing does not pay — that the financial calculus of illegal enrichment is disrupted at its root. The Supreme Court's 9-0 decision affirms that principle with the full weight of a unanimous bench. The Trump administration stood behind it in court.

Between January and October of 2025, that same administration issued a series of pardons to some of the most prominent financial wrongdoers in the recent history of American markets.

In January, Trump pardoned Ross Ulbricht, founder of the Silk Road dark-web marketplace, who had been serving two life sentences plus forty years for narcotics trafficking and money laundering. In March, he pardoned Arthur Hayes, Benjamin Delo, Samuel Reed, and Gregory Dwyer — the co-founders and a senior executive of BitMEX, the cryptocurrency exchange that prosecutors had described as a money laundering platform and whose operating entity had been fined $100 million for Bank Secrecy Act violations. The four individuals had pleaded guilty; each had been ordered to pay $10 million in civil fines. The pardons were full and unconditional. In October, Trump pardoned Changpeng Zhao, known as CZ, the founder of Binance, who had pleaded guilty to enabling money laundering, paid a $50 million fine, and served four months in prison. Binance itself had settled with regulators for $4.3 billion.

The principle the Supreme Court affirmed Thursday — that wrongdoers must disgorge their illegal gains — was quietly suspended for each of these men by executive clemency. The money they were ordered to return, or were liable to return, became theirs to keep. The pardon power, which exists in the Constitution as a mechanism of mercy in individual cases of injustice, was applied wholesale to an industry that had donated heavily to Trump's 2024 campaign and whose political support he had explicitly courted.

The Trump administration's decision to defend the SEC in Sripetch is not, on its face, contradictory. The case involved a defendant named Ongkaruck Sripetch, ordered to repay more than $3 million in connection with a financial fraud scheme. Sripetch had no political connection to the administration, no crypto industry profile, and no constituency whose approval Trump required. Defending the SEC against his appeal cost the administration nothing.

That is precisely the point. The administration's position on financial accountability is not a principle — it is a preference applied selectively based on who the defendant is. A broad disgorgement power is useful when it can be directed at people the administration doesn't care about. It is suspended by pardon when the defendant is a crypto founder who attended the inaugural ball.

Paul Atkins, Trump's SEC chair, has overseen a quiet withdrawal from aggressive crypto enforcement since taking office. Cases that the Biden-era SEC had pursued have been dropped or deprioritized. The same agency whose broad disgorgement authority was defended before the Supreme Court Thursday has been exercising that authority with notable restraint toward the industry whose legal jeopardy Trump's pardons were designed to erase.

The contradiction here is not subtle and it is not accidental. It is the operating logic of an administration that has consistently treated the machinery of law enforcement as a tool to be aimed rather than a principle to be applied. The SEC's disgorgement power is worth defending when it points at strangers. The same power is neutralized by pardon when it points at donors.

What the Supreme Court affirmed Thursday is that wrongdoers cannot keep their illegal profits. What the Trump administration demonstrated in 2025 is that this rule has exceptions, and that the exceptions are purchased with political loyalty and campaign contributions.

Nine justices agreed on the principle. The president spent the year before the ruling undermining it. Both things are simultaneously true, and the distance between them is a useful measure of what financial accountability actually means in the current moment — not a system of rules applied equally, but a set of tools distributed unequally, pointed selectively, and suspended on demand for the right people.

The court's ruling will be cited in future enforcement actions. The pardons will not be rescinded. The wrongdoers the administration chose to protect will keep what they have. Everyone else remains subject to the principle the administration successfully defended.

On the Supreme Court ruling in Sripetch v. SEC: Reuters via Yahoo Finance — "US Supreme Court backs SEC in fight over 'disgorgement' power" (June 4, 2026) National Law Review — "Supreme Court to Resolve Circuit Split on SEC Disgorgement Powers" (January 14, 2026) Greenberg Traurig LLP — "Supreme Court to Resolve Circuit Split on SEC Disgorgement Powers" (January 14, 2026)

On the BitMEX pardons: CoinDesk — "President Trump Pardons Arthur Hayes, 3 Other BitMEX Co-Founders and Employee" (March 28, 2025) CNBC — "Trump pardons BitMEX co-founders, White House official says" (March 28, 2025) Reuters via AOL — "Trump pardons BitMEX co-founders, White House official says" (March 28, 2025)

On the Changpeng Zhao/Binance pardon: Yahoo Finance — "Trump Pardoned 3 Crypto Felons In 10 Months — Here's What Each One Cost" (January 4, 2026) Bitget News — "All of Trump's Pardons of Prominent Crypto Figures — So Far"

On the broader crypto pardon pattern and campaign donation context: Bitcoin Ethereum News / COINOTAG — "Trump Pardons of Bitcoin-Linked Ulbricht, Others May Signal Crypto Policy Shift"

On Paul Atkins and SEC enforcement withdrawal: This is characterized from the general reporting record on Atkins' tenure rather than a single sourced article.