House Democrats accuse the SEC of selective crypto enforcement after Justin Sun's $75M Trump investment preceded a case pause.
SEC Pauses Justin Sun Case After Trump Investment
House Financial Services Democrats just sent a letter to SEC Chair Paul Atkins that reads less like oversight and more like an accusation. The core claim: Justin Sun invested heavily in Trump family crypto ventures, and shortly after, the SEC paused its fraud case against him.
The timeline is hard to ignore. Sun bought $30 million of World Liberty Financial tokens in November, added another $45 million in January, became the largest holder of the Trump memecoin, and attended an exclusive White House dinner reserved for top investors. Then in February, the SEC—which had sued Sun in 2023 for wash trading and unregistered securities—asked a federal judge to stay the case to explore a settlement.
Rep. Maxine Waters wrote that this creates "the unmistakable appearance of a pay-to-play arrangement." Her letter, co-signed by Reps. Brad Sherman and Sean Casten, points out that crypto companies donated at least $95 million to Trump's campaign, and several major firms contributed to his inauguration. The SEC has dropped or paused at least a dozen crypto enforcement cases since Atkins took over, including actions against Coinbase, Binance, and Kraken.
But the letter goes further than corruption allegations. It raises national security concerns, citing court records and news reports suggesting Sun resides in China and maintains ties to Chinese Communist Party institutions. One detail mentioned: a 2021 announcement that Sun would work with China's Central Party School on a project involving the country's central bank. The lawmakers also referenced claims that Tron's 2017 ICO drew participation from wallets allegedly linked to what they called a "CCP-connected crypto crime cartel."
The letter demands that the SEC either request the court lift the stay and litigate the case as originally filed, or reach a settlement that reflects the strength of the allegations. It also requests preservation of all communications with third parties seeking to influence the outcome.
What struck me reading this wasn't just the pay-to-play framing—it was the dual-track argument. Democrats are positioning this as both a corruption issue and a security risk, which makes it harder to dismiss as partisan noise. Whether that argument holds up depends entirely on what those preserved documents eventually show.
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