- Representative Maxine Waters questioned the SEC’s decision to pause its fraud case against Justin Sun, suggesting a “pay-to-play” link to his US$75 million investment in Trump-affiliated crypto projects.
- SEC Chairman Paul Atkins refused to discuss the specific case but confirmed the agency is shifting away from “regulation-by-enforcement” to focus on “real fraud” involving securities.
- The probe involves allegations that Sun used 600,000 wash trades to manipulate token prices, a case that remains unresolved 11 months after the SEC first requested a stay.
Democrats challenged SEC Chair Paul Atkins on Wednesday over why the agency’s case against Tron founder Justin Sun has stalled, and whether Sun’s links to President Donald Trump matter.
In a Wednesday hearing, Rep. Maxine Waters, the ranking Democrat on the House Financial Services Committee, focused on the SEC’s 2023 allegations that Sun and his companies manipulated TRX markets, including claims his staff ran more than 600,000 wash trades to inflate trading activity.
The SEC asked a court to pause the case about a year ago while it explored a settlement. No settlement has been announced.
Waters said Sun has since moved closer to Trump’s orbit through ties to the Trump-linked crypto venture World Liberty Financial, and asked whether politics is affecting enforcement. She also pointed to a recent public claim by an alleged former girlfriend of Sun, who said she had evidence of TRX manipulation.
Atkins said he could not discuss specific cases in public but offered to brief lawmakers privately if rules allow. Pressed on whether his “real fraud” focus includes crypto, he said the SEC will act on “whatever involves securities.”
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Trump’s Questionable Crypto Ventures
The hearing also revisited the SEC’s broader retreat from crypto cases under new leadership.
Democrats cited dropped or wound-down actions involving firms including Binance, Ripple, Coinbase, Kraken and Robinhood. The SEC’s new leadership has criticised the prior approach as “regulation by enforcement.”
Democrats tied the issue to Trump’s growing crypto interests. Bloomberg has estimated Trump has made about US$1.4 billion (AU$2.14 billion) from crypto ventures, and the Trump family holds a 20% stake in mining firm American Bitcoin.
Trump recently nominated Kevin Warsh as Fed Chair to succeed Jerome Powell when his term expires in May of this year.
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