SEC Under Fire: Paul Atkins Faces Questions on Crypto Regulation Pause

TLDR

• SEC Chair Paul Atkins is under scrutiny for pausing the case against Justin Sun.
• Democratic lawmakers question whether political ties influence the SEC’s enforcement decisions.
• The SEC’s overall legal actions dropped by 30% in 2025, with a 60% decline in crypto-related cases.
• Paul Atkins defends the SEC’s approach, emphasizing a balanced enforcement strategy.
• Lawmakers express concerns about the SEC’s decision to drop high-profile crypto cases like Binance and Ripple.

The U.S. Securities and Exchange Commission (SEC) Chair, Paul Atkins, is facing increased scrutiny from lawmakers regarding the agency’s shifting approach to cryptocurrency regulation. At a House Financial Services Committee hearing, lawmakers questioned his leadership as the SEC’s enforcement actions have slowed. The hearing focused on the SEC’s decision to pause the case against Tron founder Justin Sun, amid concerns about political connections and the agency’s declining crypto-related actions.

Paul Atkins Faces Lawmaker Scrutiny Over Enforcement Shifts

During the hearing, Democratic lawmakers voiced concerns about the SEC’s decision to pause the case against Justin Sun, founder of Tron. Representative Maxine Waters questioned whether industry ties to former President Donald Trump influenced the agency’s enforcement actions. She also pointed to the broader decline in enforcement efforts after Trump took office, and new leadership under Paul Atkins was appointed to the SEC in 2025.

Waters specifically referenced the SEC’s 2023 lawsuit against Sun. The lawsuit accused him of organizing the unregistered sale of crypto securities related to the TRX and BTT tokens and manipulating trading volumes. However, in February 2025, the SEC requested that a federal court pause the case. Since then, Sun has emerged as a prominent financial backer of Trump-affiliated crypto ventures.

SEC Chair Defends Reduced Enforcement in Cryptocurrency Cases

Atkins defended the SEC’s approach, asserting that the agency continues to pursue a robust enforcement effort. He emphasized that the SEC is still active in bringing cases against violators, but the total number of actions has dropped. According to Cornerstone Research, the SEC’s overall legal actions fell 30% in 2025, with crypto-related cases dropping by 60%.

When asked about the SEC’s leniency toward some high-profile crypto cases, including those involving Binance, Ripple, Coinbase, Kraken, and Robinhood, Atkins responded cautiously. He declined to discuss specific cases, citing confidentiality concerns. However, he did reiterate his commitment to a balanced approach in overseeing the cryptocurrency market.

Lawmakers Raise Concerns About SEC’s Crypto Enforcement Priorities

Lawmakers were quick to question the SEC’s decisions to drop several high-profile cases against major players in the crypto industry. The SEC dismissed its lawsuit against Binance in May 2025, which had accused the company of offering unlicensed services and misleading investors about its trading controls. The agency also ended litigation involving Ripple, Coinbase, and other firms linked to the crypto industry.

Representative Stephen Lynch expressed frustration, asking how such high-profile cases could end without any enforcement actions. He emphasized the reputational damage the SEC has suffered due to these decisions. Despite these concerns, Paul Atkins maintained that the agency’s overall strategy is focused on ensuring market integrity while maintaining flexibility in enforcement.