Key highlights:
- Three Democratic lawmakers questioned the SEC over dismissed crypto cases, including Binance and Tron.
- The SEC’s stay of proceedings against Tron founder Justin Sun raises concerns about selective enforcement.
- Political shifts at the SEC create uncertainty for investors and may impact traditional financial oversight.
Three Democratic members of the U.S. House of Representatives have demanded that SEC Chairman Paul Atkins provide details regarding the dismissal of at least a dozen cryptocurrency-related cases. Lawmakers focused particularly on the suspended case against TRON founder Justin Sun.
Representatives Maxine Waters, Brad Sherman, and Sean Casten sent a letter to Atkins raising concerns about the SEC’s priorities and effectiveness. They noted that the agency had dismissed most of its cryptocurrency-related cases, including cases against major exchanges such as Binance, Coinbase, and Kraken.
The letter specifically requested that the SEC reconsider the suspension of proceedings against Sun. In February, SEC lawyers had asked a federal court to temporarily halt enforcement actions against the Tron founder while exploring a possible settlement.
Concerns about corruption and investor confidence
Waters, Sherman, and Casten also raised questions about Sun’s ties to China, suggesting that the closure of his case could be part of a corrupt scheme. They linked this to Sun’s purchase of millions of dollars’ worth of tokens from World Liberty Financial, a cryptocurrency company previously backed by former President Donald Trump and his sons.
Justin Sun and Eric Trump at Token 2049
The lawmakers argued that the SEC’s decision to suspend the case against Sun could undermine investor confidence in the agency. They warned that without a strong, independent commission, capital formation and the broader economy could suffer.
They also stated that the case had been pending for 11 months and that this delay might signal to the market that securities laws were being applied selectively.
Members of Congress have demanded that the SEC preserve and provide all documents and communications related to the Sun decision.
In December, Waters had urged the House Financial Services Committee to hold hearings on what she described as the SEC’s rapid, significant, and questionable policy changes under the Trump administration.
Political shifts intensify the situation
The situation is further complicated by changes in the SEC’s political composition. Earlier this month, Caroline Crenshaw, the last Democratic commissioner, left the agency. Now, only three Republican commissioners remain: Mark Uyeda, Hester Pierce, and Paul Atkins.
President Trump has not announced candidates for the two open commissioner seats, nor indicated any plans to maintain bipartisan balance by nominating Democrats. A similar situation exists at the Commodity Futures Trading Commission (CFTC), where the only active commissioner is Republican Michael Selig, also appointed by Trump.
From a data-driven perspective, abrupt shifts in regulatory policy during political transitions create uncertainty for both crypto and traditional financial markets.
Analysts say that a Republican-dominated SEC could lead to reevaluation of crypto matters and securities oversight, raising questions about the long-term stability of the financial system.
Source: https://coincodex.com/article/80251/three-democrats-demand-sec-reopen-case-against-justin-sun/
