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The Securities and Exchange Commission’s moves to dismiss several prominent enforcement actions against crypto firms in the context of President Donald Trump’s support from the industry “has created the unmistakable inference of a pay-to-play scheme,” according to a letter to Chair Paul Atkins from Democratic lawmakers.
In the letter, House Financial Services Committee Ranking Member Rep. Maxine Waters (D-Calif.), as well as Reps. Brad Sherman (D-Calif.) and Sean Casten (D-Ill.) catalog dismissals of cases against Coinbase, Binance and Kraken, and urge the agency not to do the same in the case against Justin Sun, who is accused of manipulative trading to boost unregistered crypto asset securities.
The legislators also note that the dismissals came “during a time of unprecedented lobbying and donations to President Trump” by the crypto industry, noting that crypto companies donated at least $95 million to the President’s re-election campaign.
Additionally, they argued that numerous companies that had dismissed cases last year, including Coinbase, Kraken, Robinhood and Crypto.com, donated at least $1 million to the president’s 2025 inauguration. Waters also expressed concern that the same scenario was playing out in the Sun case, which has been on hold at the agency’s request for nearly a year.
“The SEC’s decision to seek a stay of its strong case against Sun, during a time when Sun has sought to curry favor with the Trump administration by investing millions of dollars in Trump family businesses, threatens to undermine investors’ confidence in the SEC,” the letter read.
Atkins hasn’t been shy with his criticism of the agency’s crypto regulatory approach during the Biden administration under prior Chair Gary Gensler. During a speech to the Federal Reserve Bank of Philadelphia in November, Atkins said that the agency should “offer more than a shrug, a threat or a subpoena” to crypto entrepreneurs, as well as “more than a web of enforcement actions” to investors determining what is and is not tokenized.
However, Democratic lawmakers see something more troubling at work than ideological leanings.
In 2023, the SEC charged “crypto asset entrepreneur” Sun with selling the crypto assets Tronix and BitTorrent through three companies while manipulating the market to make it appear the assets were actively trading. Meanwhile, the agency also charged numerous celebrities, including Lindsay Lohan, Jake Paul and Soulja Boy, with touting Sun’s crypto assets on social media without disclosing they were paid to do so.
However, shortly after Trump’s inauguration in February 2025, the agency asked to stay the case against Sun, in contradiction to previous SEC staff recommendations, according to Waters’ letter.
As the case progressed, Waters accused Sun of going “above and beyond to funnel money to the Trump family crypto business,” including investing at least $75 million in the Trump family-backed crypto World Liberty Financial (while also serving as an official advisor). Additionally, Waters cited Sun as the top purchaser of the $TRUMP token, earning an invitation to a White House dinner hosted by Trump for his memecoin’s top buyers.
“These activities create the unmistakable appearance of a pay-to-play arrangement: a defendant to an SEC enforcement action pours tens of millions into ventures tied to the president’s family, and shortly thereafter, his case is stayed,” the Waters letter read. “Then, he continues to funnel millions more dollars to the president’s businesses, and have personal meetings with the president and his son, while a settled resolution to that case is pending.”
The SEC declined to comment via a spokesperson.
The letter also questioned Sun’s alleged ties between himself, his company Tron Foundation, and the People’s Republic of China, speculating that “Sun’s documented interactions with PRC and CCP entities, combined with Tron’s substantial global reach, present a plausible vector for state influence over assets widely accessible to U.S. investors.”
The letter was released after Republican leaders of the Senate Banking Committee postponed a Thursday markup of a Senate bill on crypto market structure legislation without setting a new date. The move came shortly after Coinbase CEO Brian Armstrong pulled his support for the bill, saying in a social media post that there were “too many issues.”
The crypto industry has pressed the need for market structure legislation as a buffer against less crypto-friendly presidential administrations and regulators, and wants it passed before the 2026 midterm elections.
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