Democrats Press SEC Chair on Dropped Crypto Cases
Three Democratic lawmakers in the US House of Representatives are pressing US Securities and Exchange Commission (SEC) Chair Paul Atkins for answers over the agency’s recent decision to close investigations or dismiss enforcement actions in what they say amounts to at least a dozen crypto-related cases. The request was outlined in a letter that was sent on Thursday by Representatives Maxine Waters, Brad Sherman, and Sean Casten, who questioned the SEC’s priorities and overall effectiveness due to the wave of dropped cases.
The lawmakers argued that the agency has “openly and boldly dismissed” the majority of its crypto enforcement actions, including high-profile cases involving Binance, Coinbase, and Kraken. While the letter mentioned these dismissals as part of a wider trend, it placed particular emphasis on the SEC’s handling of its case against Justin Sun, the founder of Tron.
Focus on Justin Sun Case and Investor Confidence
In February, SEC lawyers asked a federal court to pause enforcement proceedings against Sun in order to explore a potential resolution. That stay has now been in place for roughly 11 months, which the lawmakers said risks undermining investor confidence in the agency. They warned that prolonged inaction sends a signal that securities laws may be enforced selectively and that politically connected individuals could avoid accountability.
The lawmakers are particularly interested in the agency’s decision to pause its case against Tron founder Justin Sun. In a letter to SEC Chair Paul Atkins, lawmakers warned that the dismissal or suspension of more than a dozen crypto-related cases risks undermining investor confidence and signals selective enforcement.
Concerns Over Sun's Connections and "Pay-to-Play" Allegations
The letter also raised concerns about Sun’s alleged connections to China and suggested that the SEC’s decision to halt the case could be linked to a “pay-to-play” dynamic. Specifically, the lawmakers pointed to Sun’s reported purchases of millions of dollars’ worth of tokens issued by World Liberty Financial, a crypto venture backed by US President Donald Trump and his sons. They urged the SEC to preserve and produce all documents and communications related to its decision-making in the Sun case.
Broader Criticism of SEC's Crypto Enforcement Under Trump Administration
The pushback comes during a time of Democratic criticism of the SEC’s direction under the Trump administration. In December, Waters called for a congressional hearing to examine what she described as rapid and questionable policy shifts at the agency, particularly the rollback of crypto enforcement actions. Casten also previously joined Senator Jeff Merkley in questioning the SEC’s handling of the Sun case.