Maxine Waters Presses SEC Chair on Justin Sun Case and Crypto Enforcement Shift

The top Democrat on the U.S. House Financial Services Committee is demanding answers from the Securities and Exchange Commission (SEC) over its handling of the enforcement case against Tron Foundation founder Justin Sun and whether his reported ties to President Donald Trump played any role in the agency’s actions.

During a Wednesday congressional hearing, Representative Maxine Waters questioned SEC Chairman Paul Atkins about the regulator’s decision to scale back or pause multiple crypto enforcement cases after a leadership change at the agency last year. Waters specifically highlighted the SEC’s 2023 lawsuit against Justin Sun, which accused him of artificially inflating the trading volume of Tron’s native token, TRX, through an alleged wash trading scheme. According to the complaint, Sun directed employees to conduct more than 600,000 wash trades between accounts he controlled.

Although the SEC moved to pause the case in court while considering a potential resolution, no settlement has been announced. Waters raised concerns that, during this period, Sun appeared to strengthen ties with individuals in Trump’s orbit, including connections to World Liberty Financial Inc. She also referenced recent public claims from an alleged former associate of Sun who suggested she has evidence of TRX price manipulation.

Chairman Atkins declined to comment on specific enforcement matters but said he would be willing to provide further details in a confidential setting, within legal limits. When asked whether the SEC’s renewed focus on “real fraud” includes fraud in crypto markets, Atkins responded that the agency will act in cases involving securities.

Under its new leadership, the SEC has dropped or paused several high-profile crypto enforcement cases involving companies such as Binance, Ripple, Coinbase, Kraken and Robinhood. Critics argue this reflects a retreat from the prior “regulation-by-enforcement” strategy, while supporters say it signals a shift toward clearer crypto regulation.

Meanwhile, the SEC and the Commodity Futures Trading Commission are working together under “Project Crypto” to clarify digital asset oversight. Their efforts align with the proposed Clarity Act and follow the passage of the GENIUS Act, which aims to establish a regulatory framework for U.S. stablecoins. As lawmakers debate federal crypto legislation, the SEC’s next moves could significantly shape the future of cryptocurrency regulation in the United States.