Democrats demand SEC explain pause in Justin Sun case
Three Democrats in the U.S. House of Representatives have asked SEC Chair Paul Atkins to explain why the agency halted its investigation into Tron founder Justin Sun and other major crypto cases.
In their letter, Representatives Maxine Waters, Sean Casten, and Brad Sherman said the regulator had stepped back from its duties and effectively shut down more than a dozen actions, including cases against Binance, Coinbase, and Kraken.
According to the lawmakers, the shift in posture is suspicious because it coincides with a sharp rise in political donations from the crypto industry. The letter states that industry firms contributed at least $85 million to Donald Trump’s campaign. Companies whose cases were later dropped by the SEC – Coinbase, Kraken, Ripple, Robinhood, and Crypto.com – each donated more than $1 million to his inauguration events.
They placed particular emphasis on Justin Sun’s case. The lawmakers noted that the SEC has kept its request to pause proceedings pending for 11 months, which they say sends a message of selective enforcement of securities laws and creates conditions where political influence can be used to avoid accountability.
The representatives also highlighted that Sun invested more than $75 million into Trump-aligned crypto projects – including World Liberty Financial – in late 2024 and early 2025. In their view, this heightens concerns that politically connected figures are receiving “special treatment” in regulatory decisions.
The case against Sun was opened in 2023. He was accused of conducting an unregistered offering of cryptoassets, manipulating trading volume, and illegally using celebrities to promote tokens. In February 2025, the SEC requested a pause to explore the possibility of a settlement.
The lawmakers also raised national-security concerns, citing Sun’s appearances in Chinese state media, his participation in research programs at the CCP’s Central Party School, and his reported links to Chinese officials.
Alongside the letter, the Democrats issued a request to preserve all documents and communications related to the SEC’s decision to pause the case, including any contacts with third parties who may have attempted to influence the process.
Sun’s team has not commented publicly on the situation.
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