Two US lawmakers are pressing the Securities and Exchange Commission (SEC) to provide answers about its handling of Tron founder Justin Sun, raising broader questions about how crypto companies go public in the US.
In a Wednesday letter addressed to SEC Chair Paul Atkins and acting director of the commission’s Division of Corporation Finance Cicely LaMothe, Senator Jeff Merkley and Representative Sean Casten questioned the timing of the agency’s decision to stay an enforcement case against Sun.
The lawsuit, filed in 2023, accused Sun of offering unregistered securities. The SEC requested a stay in February 2025, shortly after former Chair Gary Gensler departed, allowing Tron Inc. to go public on Nasdaq via a reverse merger in July.
Concerns over political and national security links
Merkley and Casten highlighted Sun’s significant investments in crypto ventures tied to US President Donald Trump and his family, including World Liberty Financial and the memecoin Official Trump (TRUMP$8.67), suggesting these connections may have influenced the SEC’s pause.
The lawmakers warned that Tron’s Nasdaq listing could pose financial and national security risks due to alleged ties with the Chinese government. They requested that the SEC ensure Tron meets “rigorous standards necessary to be listed on US stock exchanges.”
Additionally, the letter scrutinized Tron’s reverse merger process, questioning whether the SEC could adequately protect American investors through potential settlements or oversight. While focused on Tron, the letter could signal wider regulatory attention on foreign crypto companies seeking public listings in the US.
Potential changes under pending market structure legislation
Since President Trump took office, the SEC under Chair Atkins has made sweeping policy changes, including dismissing investigations and enforcement actions into several crypto firms. However, ongoing legislative efforts may redefine the agency’s regulatory framework.
In July, the Republican-controlled House passed the CLARITY Act, establishing a crypto market structure. Senate Banking Committee leadership plans to draft a complementary bill, with potential enactment by 2026. Proposed frameworks aim to modernize rules for digital assets and clearly define the roles of the SEC and Commodity Futures Trading Commission (CFTC).
If enacted, the legislation could reshape how foreign and domestic crypto companies, including Tron, access US public markets and address regulatory compliance challenges.