House Democrats Press SEC Chair Paul Atkins Over Halted Crypto Enforcement Cases

Three senior House Democrats have urged Securities and Exchange Commission (SEC) Chairman Paul Atkins to restart aggressive enforcement in the cryptocurrency sector, warning that recent actions could undermine investor protection and public trust in U.S. financial markets.

In a strongly worded letter sent Thursday, Representatives Maxine Waters, Sean Casten, and Brad Sherman criticized the SEC for dismissing or pausing more than a dozen crypto-related enforcement cases since early 2025. These cases included high-profile actions against major crypto exchanges such as Binance, Coinbase, and Kraken, several of which had already secured early legal victories for the SEC in court. Waters, the top Democrat on the House Financial Services Committee, emphasized that these reversals represent a sharp departure from the agency’s prior stance on crypto regulation.

The lawmakers argued that stepping back from enforcement exposes investors to heightened risk and weakens market integrity. They also highlighted the timing of perceived enforcement pullbacks alongside significant political donations from the crypto industry to U.S. President Donald Trump, as well as growing financial and personal ties between crypto executives and the president. According to the letter, this pattern creates the appearance of a “pay-to-play” environment in federal financial regulation.

A central focus of the letter was Tron founder Justin Sun, who was sued by the SEC in 2023 for allegedly selling and airdropping unregistered securities, engaging in fraud, and manipulating markets. The investigation into Sun was paused in February of last year under then-acting SEC Chair Mark T. Uyeda and has continued to remain on hold under Atkins. Lawmakers noted Sun’s expanding connections to the Trump family and raised concerns about alleged links to entities associated with the Chinese Communist Party.

The Democrats urged the SEC to either resume its case against Sun or negotiate a meaningful settlement. They also demanded transparency, requesting internal documents and communications related to the agency’s decision to halt or dismiss crypto enforcement actions.

Adding to the pressure, a new report from watchdog group Public Citizen accused the Trump administration of weakening corporate accountability by halting or canceling 159 enforcement actions against 166 companies. The report claims these decisions allowed corporations to avoid at least $3.1 billion in potential penalties, raising broader concerns about political influence over regulatory independence and investor protection.