SEC Faces Backlash from House Democrats Over Dropped Crypto Cases

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TLDR

House Democrats criticized the SEC for dismissing multiple crypto-related enforcement cases, including those against Binance, Coinbase, and Kraken.
The lawmakers raised concerns about political influence over the SEC, citing financial ties between crypto executives and President Trump.
They accused the SEC of creating a “pay-to-play” scheme by halting investigations into figures like Justin Sun, linked to Trump.
The lawmakers called for the SEC to resume its investigation into Justin Sun or reach a meaningful settlement.
They demanded transparency from the SEC, requesting documents and communication records related to the decision to drop the cases.

Three senior House Democrats criticized the Securities and Exchange Commission (SEC) for dropping multiple crypto-related enforcement cases. Representatives Maxine Waters, Sean Casten, and Brad Sherman accused the agency of dismissing cases against major crypto firms with ties to President Donald Trump. The lawmakers claim that the SEC’s actions raise concerns about political influence over market oversight.

SEC Faces Criticism for Dropping Enforcement Cases

The lawmakers highlighted that the SEC had dismissed at least a dozen cases related to prominent crypto exchanges such as Binance, Coinbase, and Kraken. These cases had shown early signs of success for the SEC, with initial court victories already secured. The representatives argue that the SEC’s abrupt reversal jeopardizes investor protection and market integrity.

In their letter, the lawmakers pointed out that the dismissals coincide with significant crypto industry donations to Trump and his associates. They believe these donations and the growing financial ties between crypto executives and the Trump family raise questions about potential political influence on the SEC’s actions. “This pattern creates the appearance of a ‘pay-to-play’ scheme,” they stated, particularly citing the case of Tron founder Justin Sun.

Calls for Transparency and Resumption of Investigations

The lawmakers demanded that the SEC resume its enforcement case against Justin Sun or reach a meaningful settlement. Sun was accused of securities fraud, market manipulation, and selling unregistered securities in 2023. The SEC had paused its investigation into Sun in February 2025 under former acting Chairman Mark Uyeda, and the delay has continued under Chairman Paul Atkins.

The letter also called for transparency regarding the SEC’s decision-making process. The lawmakers requested access to documents and communication records related to the dismissal of these cases. They urged the agency to demonstrate that its actions have not been influenced by political connections or financial donations from the crypto industry.

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