House Democrats Just Blasted SEC Chair for Dropping Ripple (XRP) Case and Others

House Democrats have issued a forceful call to the U.S. Securities and Exchange Commission (SEC), asserting that the agency has significantly retreated from its enforcement responsibilities in the rapidly evolving cryptocurrency sector.

In a detailed letter on January 15, 2026, addressed to SEC Chair Paul S. Atkins, Democratic lawmakers expressed deep concern about the agency’s recent decisions to dismiss, close, or put on hold more than a dozen high-profile crypto enforcement actions filed since early 2025.

This development has prompted questions about the SEC’s commitment to protecting investors and enforcing securities laws in the digital asset space.

Allegations of Enforcement Retreat and Political Influence

The letter, authored by Representatives Maxine Waters, Brad Sherman, and Sean Casten, asserts that the SEC’s dismissal of over twelve major crypto cases, including those against Binance, Coinbase, and Kraken, represents a dramatic shift away from robust enforcement.

According to the lawmakers, in each of these matters, the SEC had previously secured favorable court rulings or had established substantive allegations of regulatory violations, yet opted to walk away from litigation or agreed to dismiss enforcement actions on discretionary or procedural grounds.

Within the text of the letter, the Democrats characterized the timing of these enforcement retreats as particularly troubling, given that many of the companies whose cases were dropped had made substantial political contributions to President Donald Trump’s campaign and inauguration events.

The lawmakers stated that firms such as Coinbase, Kraken, Ripple, Robinhood, and Crypto.com each contributed significant sums in the context of these political activities, a pattern that, in their view, creates what they described as an inference of “pay-to-play” dynamics influencing regulatory outcomes.

Focus on the Justin Sun Litigation

The letter places particular emphasis on the SEC’s handling of its enforcement action against Justin Sun, the founder of the Tron Foundation. The SEC initially filed civil charges against Sun in 2023, alleging that he orchestrated unregistered securities offerings, manipulated trading volumes, and improperly promoted digital assets.

In February 2025, the agency requested that a federal court stay the proceedings to explore a potential settlement, and that stay has remained in place for approximately eleven months.

Democrats argue that the extended pause in the Sun case undermines confidence in the consistent application of securities laws. They contend that this situation sends a concerning signal to market participants about selective enforcement, particularly given Sun’s significant investments of tens of millions of dollars in crypto ventures linked to the Trump family and affiliates.

The lawmakers called on the SEC either to lift the stay and pursue litigation consistent with the strength of its original complaint or to negotiate a settlement that adequately reflects the gravity of the alleged misconduct.

Demand for Transparency and Accountability

In addition to urging renewed action on the Justin Sun matter, the letter requests a full accounting from the SEC regarding the rationale behind its recent enforcement decisions.

Lawmakers demanded documentation and communications relevant to the agency’s choices to dismiss or halt these cases, including any external contacts or influences that may have played a role.

Their communication underscores a wider concern that inconsistent enforcement threatens investor protection and the credibility of the SEC’s regulatory mission.

Stakes for Crypto Oversight

The House Democrats’ letter represents a significant moment in the intersection of public policy, financial regulation, and digital asset markets.

By challenging the SEC’s recent actions and calling for transparency and accountability, these lawmakers have signaled heightened legislative scrutiny of federal crypto enforcement practices and raised fundamental questions about the integrity of U.S. securities regulation in the digital era.