Update (Jan. 16 at 7:35 pm UTC): This article has been updated to include a response from Justin Sun.
Three Democrats in the House of Representatives are asking US Securities and Exchange Commission (SEC) Chair Paul Atkins to provide information related to the agency closing investigations, dismissing enforcement actions, or pausing cases through extended stays in “at least one dozen crypto-related cases,” including Tron founder Justin Sun.
In a Thursday letter to Atkins, Representatives Maxine Waters, Brad Sherman and Sean Casten questioned the SEC’s “priorities and effectiveness” given its dismissals of the crypto-related cases. The lawmakers wrote that the agency had “openly and boldly dismissed the majority of its crypto enforcement cases,” including cases involving crypto exchange Binance, Coinbase and Kraken.
The bulk of the letter, however, urged the SEC to consider reopening its case against Sun. In February, the agency’s lawyers asked a federal court to stay its enforcement action against the Tron founder to explore a potential resolution.
Waters, Sherman and Casten raised questions about Sun’s connections to China and said that the case being dropped “may be part of a pay-to-play scheme,” given the Tron founder’s purchasing of millions of dollars worth of tokens from World Liberty Financial, the crypto company backed by US President Donald Trump and his sons. There is no public evidence that the token purchases influenced the SEC’s decision, and the agency has not commented on the allegation.
“The SEC’s decision to seek a stay of its strong case against Sun […] threatens to undermine investors’ confidence in the SEC,” said the letter, adding:
“Without a strong, independent SEC, capital formation will undoubtedly suffer, as would our real economy. The SEC’s request to stay the Sun case, which has now been in place for 11 months, signals to the market that securities laws are enforced selectively, and that those with sufficient political influence can evade accountability.”
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The three lawmakers asked the SEC to preserve and produce all documents and communications regarding its decision in the Sun case. Cointelegraph reached out to the SEC for comment, but had not received a response at the time of publication.
A spokesperson for Sun told Cointelegraph that the letter contained “numerous misstatements of the record and of fact,” and personally attacked him ”based on unproven allegations and mere innuendo.”
“The SEC matter remains pending, and Justin Sun has not sought to influence its outcome,” said the spokesperson for the Tron founder, adding that:
“He [Sun] respects the independence of the SEC and is engaging through appropriate legal channels. He has not requested special treatment, nor conditioned any commercial activity on regulatory decisions.”
In December, Waters called on Representative French Hill, who chairs the House Financial Services Committee, to hold a hearing to explore what she called the SEC’s “rapid, significant, and questionable policy shifts during the Trump Administration.” She cited the agency terminating and staying enforcement actions against crypto companies.
Casten also joined with Senator Jeff Merkley to question the SEC’s dropping of the Sun case in a September letter to Atkins.
SEC left without Democratic commissioners after Crenshaw’s departure
Caroline Crenshaw left the SEC earlier this month as the last remaining Democratic commissioner. Her departure left the agency with three Republican commissioners, Mark Uyeda, Hester Pierce and Atkins.
As of Thursday, Trump had not announced any potential replacements for the two empty commissioner seats, nor any plans to maintain the bipartisan balance by nominating Democrats.
The Commodity Futures Trading Commission (CFTC) is in a similar situation, where the only sitting commissioner, Michael Selig, is a Trump-picked Republican. The CFTC’s leadership normally consists of five Senate-confirmed commissioners.
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