Democrats Slam SEC ‘Pay-to-Play’ Risk; Demand Answers on Justin Sun Case
Ranking Member Waters demands answers from SEC Chair Atkins, citing a ‘pay-to-play’ dynamic after the agency stayed its case against Justin Sun following his $75M investment in World Liberty Financial.
The Accusation: Enforcement for Sale?
House Democrats formally accused the SEC of fostering a “pay-to-play” environment today, demanding Chair Paul Atkins explain why the agency paused its fraud case against Justin Sun shortly after the Tron founder invested over $75 million in the Trump-backed World Liberty Financial (WLFI). In a letter sent Thursday, Ranking Member Maxine Waters, along with Reps. Sean Casten and Brad Sherman, blasted the agency’s “dramatic retrenchment” from crypto enforcement, citing the dismissal or suspension of nearly 60% of digital asset cases since January 2025.
The unjustified decision by the SEC to walk away from these and other meritorious enforcement cases against crypto firms has created the unmistakable inference of a pay-to-play scheme. Rep. Maxine Waters (D-CA)
The $75M Timeline
The lawmakers focused on a specific sequence of events involving Sun, who faced charges of wash trading and selling unregistered securities. According to the letter, the SEC agreed to stay its enforcement action in February 2025, just weeks after Sun confirmed a total $75 million investment into World Liberty Financial, a DeFi protocol with direct financial ties to the First Family. The stay has now stretched for 11 months, leaving the allegations of market manipulation unaddressed.
Market Reaction & Institutional Context
TRX, the native token of the Tron network, remained flat at $0.30 (-1.1%) following the news, reflecting a market that has largely priced in a lighter regulatory touch under the Atkins regime. However, the political pressure creates a new risk vector for the protocol.
The letter highlights a broader pattern: beyond Sun, the SEC has dropped high-profile litigation against Binance, Coinbase, and Kraken over the last year. Democrats argue this signals to the market that “securities laws are enforced selectively,” potentially forcing a showdown in the House Financial Services Committee if Atkins fails to provide the requested internal documents by the end of the month.
