SEC Chair Paul Atkins Questioned Over Dropped Crypto Cases

Posted on by

TLDR

  • Lawmakers grilled SEC Chair Paul Atkins over the agency’s reduced crypto enforcement activity.
  • Democrats voiced worries about the SEC pausing its case against Tron founder Justin Sun and dropping its lawsuit against Binance.
  • Legislators probed whether former President Donald Trump’s connections to the crypto sector influenced the SEC’s choices.
  • SEC enforcement activity fell 30% in 2025, while crypto-related cases plunged 60% from the prior year.
  • Representative Stephen Lynch condemned the SEC for harming its reputation and demanded answers about the abandoned cases.

During a House Financial Services Committee hearing, legislators expressed concerns regarding the SEC’s evolving stance on cryptocurrency oversight. Chair Paul Atkins encountered intense questioning about the agency’s recent drop in enforcement actions, specifically concerning major crypto players like Binance and Tron founder Justin Sun. Democrats questioned if ties to former President Donald Trump influenced these moves.

SEC Drops Cases Against Major Crypto Players

At the hearing, SEC Chair Paul Atkins addressed the agency’s choice to halt its case against Tron founder Justin Sun. The SEC had charged Sun in 2023 with conducting unregistered crypto securities offerings and artificially inflating trading volumes. By February 2025, however, the agency sought to pause the proceedings, raising concerns about political interference after Sun emerged as a major investor in cryptocurrency projects connected to Trump.

Additionally, the SEC withdrew its lawsuit against Binance in May 2025, which had alleged the crypto exchange provided unlicensed services and misrepresented its trading safeguards. Binance and its CEO Changpeng Zhao had previously pleaded guilty to Bank Secrecy Act violations in 2023, paying over $4 billion to resolve a Justice Department probe. President Trump subsequently pardoned Zhao, adding another layer of complexity to the matter.

Democrats Question SEC’s Enforcement Efforts Under Atkins

Democratic legislators voiced alarm over the steep drop in cryptocurrency enforcement actions. Research from Cornerstone Research showed that SEC enforcement activity decreased 30% in 2025 from the year before. The reduction in crypto-related cases was especially notable, falling 60%, suggesting a potential change in the agency’s enforcement focus.

Massachusetts Representative Stephen Lynch condemned the SEC’s case management, questioning how these situations unfolded without enforcement measures. “The reputational harm the SEC is experiencing currently is astounding,” Lynch stated. Though these concerns were raised, Atkins defended the commission, asserting that the SEC’s efforts continued to be vigorous and proactive in initiating new actions.

Trump’s Crypto Ventures and Alleged Conflicts

Legislators continued to question Atkins regarding former President Donald Trump’s engagement with the cryptocurrency sector. Trump’s business endeavors, including World Liberty Financial, have sparked concerns about possible conflicts of interest. Estimates indicate Trump has generated over $1.4 billion from his cryptocurrency initiatives, with his family owning a 20% stake in American Bitcoin.

Illinois Representative Sean Casten questioned Atkins about whether any proof existed that investors suffered harm due to the SEC’s decisions. Representative Sylvia Garcia also inquired whether Trump, his family, or his administration had ever attempted to sway Atkins’ enforcement decisions. Atkins flatly rejected any such influence, stating that Trump and his associates had made no requests concerning SEC actions.

As the SEC continues to adjust its cryptocurrency regulatory framework, the agency is striving to update its rules. Recently, the SEC and the Commodity Futures Trading Commission (CFTC) have partnered to revise their regulations, concentrating on cryptocurrency products.