SEC Chair Paul Atkins is facing pressure from Democratic lawmakers over the agency’s evolving approach to crypto regulation, particularly its decision to pause the 2023 lawsuit against Tron founder Justin Sun.
During a House Financial Services Committee hearing, Representative Maxine Waters questioned why the SEC requested a stay in the case earlier this year. The original lawsuit accused Sun of orchestrating unregistered securities sales tied to TRX and BTT and manipulating trading volumes. Since the pause, Sun has become a major backer of Trump linked crypto ventures, reportedly purchasing billions in WLFI tokens tied to World Liberty Financial. Waters also cited recent public allegations from Sun’s former partner claiming she holds evidence of token manipulation.
Atkins declined to comment on the specifics of the case, stating he cannot discuss individual enforcement matters publicly but would be open to confidential discussions where permitted. When pressed about potential conflicts involving Trump affiliated businesses, he said he could not speak to the Trump family’s activities.
Lawmakers also raised concerns about the SEC dropping several high profile cases in 2025, including actions against Binance, Ripple, Coinbase, Kraken, and Robinhood. The Binance case drew particular scrutiny after Trump pardoned former CEO Changpeng Zhao and a stablecoin linked to World Liberty Financial was reportedly used in a 2 billion dollar investment in the exchange.
Representative Stephen Lynch criticized the agency’s recent direction, pointing to reputational damage and asking for clarity on enforcement decisions. Atkins responded that the SEC continues to maintain a strong enforcement program.
However, data from Cornerstone Research shows total SEC enforcement actions fell 30 percent in 2025, while crypto related cases declined by 60 percent. Atkins, who became chair in April 2025 following Gary Gensler’s departure, has consistently signaled a move away from the prior administration’s litigation heavy strategy toward what he describes as a more balanced regulatory framework.
