The US Securities and Exchange Commission (SEC) came under scrutiny on Wednesday. This is after lawmakers questioned the agency’s chairman regarding the agency’s stalled case against Justin Sun. The session was led by Representative Maxine Waters.
The SEC’s case against Justin Sun is a topic of concern. Rep. Maxine Waters stated that the SEC dropped several cryptocurrency-related cases after the administration changed. She stated that the agency previously investigated Justin Sun and the Tron Foundation.
She told the committee that the case involved various allegations. These allegations included Justin Sun’s efforts to raise the price of the cryptocurrency known as TRX.
SEC’s TRX Probe and Rising Trump-Related Concerns
The SEC charged Justin Sun in 2023. The complaint alleged that Sun inflated TRX trading volume using wash trading. The agency stated that Justin Sun’s employees carried out over 600,000 trades between two accounts that Justin Sun controlled.
The agency then put the case on hold to consider a resolution. No resolution has been made regarding the case. Waters told the chairman that Justin Sun’s connections with individuals related to Donald Trump increased during the period the case was on hold.
She stated that Justin Sun is connected to a company known as World Liberty Financial Inc. This company is related to the Trump family.
She also referred to recent allegations made by a woman who claimed she was in a relationship with Sun. Waters stated that the woman made public comments about having evidence of manipulation by TRX.
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Tron and Sun did not make any comments about the hearing. Waters then asked Atkins if his focus on “real fraud” includes the crypto market. Atkins replied that the SEC would act if securities were involved. He did not elaborate further.
Pressure Mounts for Clear Crypto Oversight
Another Democratic lawmaker asked Atkins whether the agency avoids enforcement when Trump-related businesses might be affected. Atkins replied that he could not comment about what the Trump family was doing. He did not make any comments about any conflict.
Democrats at the hearing mainly discussed the SEC’s reversal of crypto enforcement actions. They referred to the dropping of enforcement actions against Binance, Ripple, Coinbase, Kraken, and Robinhood. They stated that this was a big change in the SEC’s policy.
Republicans urged Atkins to provide regulatory clarity for digital asset firms. They asked about the SEC’s ongoing work with the Commodity Futures Trading Commission.
They stated that digital asset companies need clear regulations to operate safely in the US. Atkins stated that both regulators are working to create regulations according to the Clarity Act.
The CFTC recently updated a no-action letter. It clarified that national trust banks can issue payment stablecoins. It also expanded eligible tokenized collateral. The industry is now watching which regulator moves first on new crypto market rules.
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