SEC head defends enforcement changes amid questions about Justin Sun cases

SEC Chairman Paul Atkins has defended the agency’s enforcement shift as lawmakers question why Justin Sun’s case was put on hold.

US Securities and Exchange Commission (SEC) Chairman Paul Atkins is facing criticism from lawmakers as the agency moves to reform its cryptocurrency regulatory framework.

Democrats are questioning possible ties between industry actors and President Donald Trump amid a broader decline in enforcement actions.

SEC investigated the Tron case

During a hearing of the House Financial Services Committee, Democratic members focused on the SEC’s decision to pause the case against Tron founder Justin Sun. Representative Maxine Waters be to what she described as a major rollback of previous crypto enforcement actions after Trump entered the White House and the new SEC leadership took power last year.

Waters was referring to the regulator’s 2023 lawsuit against Sun, which accused him of orchestrating the unregistered sale of crypto securities tied to the TRX and BTT tokens and manipulating trading volumes.

Later in February 2025, the SEC asked the federal court overseeing the case to issue a stay, pausing the proceedings. Since that decision, Sun has become a major financial supporter of Trump-linked crypto ventures, purchasing billions of WLFI tokens, making him World Liberty Financial’s largest backer.

Waters also highlighted a more recent claim from his alleged ex-girlfriend, who publicly suggested she possesses evidence of TRX manipulation.

Atkins declined to discuss the details of the case, telling lawmakers he could not comment on individual enforcement issues. He added that he would be open to further discussion in a confidential environment “as far as the rules allow me.”

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Asked whether the agency ever acts to protect investors in a way that could negatively impact Trump-affiliated companies, he said: “What the Trump family does or doesn’t do, I can’t comment on that.”

Trump’s ties to Binance

Lawmakers have also raised concerns about other high-profile lawsuits the SEC dropped last year, including cases against Binance, Ripple, Coinbase, Kraken and Robinhood.

In May 2025, the financial watchdog ended its lawsuit against Binance, which it had sued in 2023 for offering unlicensed services and misrepresenting trading controls. Trump also later pardoned Zhao, while a stablecoin issued by WLF was used by an Abu Dhabi investment firm for a $2 billion investment in Binance.

“Explain to me how this is happening without any enforcement action,” said Rep. Stephen Lynch. “The reputational damage the SEC is currently suffering is unbelievable. And you’re in the chair, sir. It’s your responsibility. I’m just asking for an explanation.”

The SEC chairman defended the regulator, saying it has a “robust enforcement effort” and continues to bring cases. However, data from Cornerstone Research shows that overall legal actions are down 30% by 2025, while crypto-related cases are down 60%.

Atkins, who became chairman of the organization in April 2025 following the departure of Gary Gensler, is known for criticizing its previous aggressive approach and describing his leadership as a move away from tactics that required heavy-handed litigation.