Three senior House Democrats on Thursday urged Securities and Exchange Commission (SEC) Chairman Paul Atkins to resume his enforcement duties in the crypto space.
In a sharply critical letter, Representatives Maxine Waters, Sean Casten and Brad Sherman said that the agency abruptly dismissed at least a dozen crypto-related enforcement cases since early 2025, including actions against Binance, Coinbase (COIN) and Kraken, all of which had seen initial court victories for the SEC. Waters leads Democrats on the House Financial Services Committee, and is poised to take over the committee if Democrats win the House in the 2026 midterm election.
The lawmakers argued this reversal puts investors and market integrity at risk and also pointed out significant crypto industry donations to U.S. President Donald Trump as well as financial ties between crypto executives and the President that coincided with the dismissals.
That pattern, according to the lawmakers, creates the appearance of a “pay-to-play” scheme, particularly in the case of Tron founder Justin Sun, given allegations of securities fraud and Sun’s growing connections to both the Trump family and, the lawmakers said, entities linked to the Chinese Communist Party.
“Failure to pursue this case sends a dangerous signal that wealthy defendants with political connections can evade accountability for even the most flagrant securities violations,” the letter stated.
Sun was sued by the SEC in 2023 on allegations of selling and airdropping unregistered securities, fraud and market manipulation. The investigation was paused in February last year under then acting chairman Mark T. Uyeda. The agency has continued to extend the pause under Atkins.
The lawmakers urged the SEC to resume its case against Sun or negotiate a meaningful settlement, saying that the agency’s current stance undermines public trust, regulatory independence and investor protection. They also demanded transparency around internal deliberations and possible outside influence, requesting documents and communication records related to the agency’s decision-making process.
On a broader scale, the letter stated that the SEC’s recent actions raise broader concerns about political influence over market oversight, particularly as crypto firms deepen financial ties with figures connected to President Trump.
“The American public deserve to know whether the SEC’s independence has been compromised and whether justice in our markets has been subordinated to political interests,” they wrote, warning that selective enforcement could erode trust in U.S. markets and leave retail investors exposed.
A report from watchdog group Public Citizen on Thursday accused the Trump administration of systematically weakening corporate accountability by canceling or halting 159 enforcement actions against 166 companies since returning to office. According to the report, the move allowed at least 18 corporations to avoid a combined $3.1 billion in penalties tied to alleged misconduct.
