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SEC Chair Paul Atkins answered questions over the agency’s stalled enforcement case against the founder of the Tron currency, Justin Sun. Speaking at a congressional briefing, Atkins reiterated the Securities and Exchange Commission’s commitment to transparency and regulatory clarity.
However, he emphasized that active litigation rules preclude public debate on active litigation. The Justin Sun matter, which has sat for almost 11 months, has become an issue in the larger debate of crypto enforcement and political influence.
Atkins said the SEC is working closely with the Commodity Futures Trading Commission to prepare for anticipated changes to legislation related to the proposed CLARITY Act.
Lawmakers press SEC over Justin Sun enforcement pause
Democratic lawmakers stepped up their questioning at the hearing. Representative Maxine Waters, ranking Democrat on the House Financial Services Committee, challenged Atkins about the agency’s handling of the Justin Sun investigation.
The SEC filed a suit against Sun in 2023, alleging unregistered securities offerings and manipulative trading practices, including over 600,000 transactions of washing designed to inflate TRX token volumes. In February 2025, both the SEC and Sun’s legal team jointly applied for a stay in proceedings.
Waters said that while the SEC was considering ways to resolve the issue, Sun built relationships within President Trump’s political orbit through World Liberty Financial Inc. She questioned whether those connections had any bearing on the agency’s decision to cease enforcement activity. She also cited allegations from Sun’s former girlfriend pointing to the evidence of TRX manipulation.
Atkins refused to comment on the specifics of the cases on the basis of legal restrictions. He told lawmakers he would provide them a confidential briefing and said he would engage further “to the extent the rules allow.”
When asked if the SEC is to continue to focus on fraud in crypto markets, he said the agency acts where securities laws apply.
SEC shift from enforcement to structured rulemaking
The Justin Sun case on hold comes amid a retreat from high-profile crypto enforcement actions. Over the past year, the SEC has dropped or wound down cases against Coinbase, Binance, Ripple, Kraken, and Robinhood.
SEC leadership has criticized the former administration’s approach as regulation by enforcement. Instead, Atkins said the agency is heading toward structured rulemaking and clearer statutory guidance.
However, critics warn that decreased enforcement may undermine investor protections. In a January 2026 letter, Representatives Maxine Waters, Ritchie Torres, and Stephen Lynch requested explanations regarding the withdrawal or pause of over a dozen crypto cases.
The controversy goes beyond regulatory philosophy. Democrats tied the issue to President Trump’s growing crypto interests. Bloomberg has estimated that Trump made $1.4 billion from crypto ventures, while the Trump family is said to possess a 20% stake in mining firm American Bitcoin. Trump has also nominated Kevin Warsh to succeed Jerome Powell as Federal Reserve Chair when Powell’s term expires in May.
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