A group of Democratic congressmen have sharply criticised the Securities and Exchange Commission (SEC) for what they see as a major step back in enforcing the U.S. securities rules against big cryptocurrency companies. They say that this action puts investors and the integrity of the market at risk.
Democratic Representatives Maxine Waters, Sean Casten, and Brad Sherman wrote to SEC Chairman Paul Atkins to complain that the SEC has dropped at least a dozen crypto enforcement proceedings since early 2025 without warning.
Lawmakers question abrupt shift in regulatory approach
Commission has dismissed or closed at least a dozen well-known crypto cases, including ongoing lawsuits against Binance, Coinbase, and Kraken, even though the courts agreed with the SEC’s fraud charges and the issuance of unregistered securities.
The SEC was able to win motions to dismiss allegations against Binance and Coinbase, but they ultimately opted to abandon the action on their own, citing regulatory rather than legal reasons.
The Democrats want to know if politics had anything to do with the closures because of when they happened. They allege that a lot of the crypto companies involved, like Coinbase, Kraken, Ripple, Robinhood, and Crypto.com, provided millions of dollars to Trump’s campaign and inauguration.
Concerns raised over political and foreign influence
The letter is about Justin Sun, who started the Tron Foundation. He is still waiting for his SEC case to go through while he spends millions of dollars on Trump-related crypto firms. Lawmakers are anxious that Sun’s connections to China and the Chinese Communist Party could make the U.S. market less safe.
Lawmakers want the SEC to either drop the hold on Sun’s case or come to a settlement that indicates how solid the SEC’s case is. They also seek copies of any documents and letters that reveal how the SEC makes judgements and whether or not politics or foreign interests might affect how it enforces the law.
Oversight tensions intensify as 2026 elections approach
The letter makes it obvious that there is a growing debate regarding the SEC’s duty to protect the United States investors and regulate cryptocurrencies in a digital asset market that is developing swiftly and is full of political conflict. Waters continued:
The sudden shift in the SEC’s stance, from strict enforcement against dishonest crypto players to potentially withdrawing a strong case, suggests that political motives, rather than legal ones, may have influenced this decision. The American people have the right to know if the SEC’s independence has been compromised and if fairness in our markets has been put second to politics. So, I want you to answer me.
Waters is in charge of the House Financial Services Democrats, so she may be the chair of the committee if her party wins back the House in 2026.