U.S. Securities and Exchange Commission (SEC) Chair Paul Atkins is under scrutiny from lawmakers regarding the agency’s plan to reshape its cryptocurrency regulatory framework.

Democrats are raising questions about possible ties between industry leaders and former President Donald Trump, amid a noticeable decline in regulatory actions.

SEC Examined Over Tron Investigation

During a recent House Financial Services Committee hearing, Democratic representatives concentrated on the SEC’s choice to pause the investigation into Justin Sun, founder of Tron. Representative Maxine Waters highlighted what she described as a significant rollback of prior enforcement measures against cryptocurrency following Trump’s presidency and the activation of new SEC leadership last year.

Waters referenced a 2023 lawsuit from the SEC against Sun, where he was accused of facilitating unregistered sales of crypto securities associated with TRX and BTT tokens while manipulating trading volumes. Later in February 2025, the SEC requested a federal court to pause the case, which consequently halted the proceedings. Since the suspension, Sun has become a notable financial backer of Trump-related crypto initiatives, investing billions in WLFI tokens and emerging as the largest supporter of World Liberty Financial.

Additionally, Waters pointed out claims made by Sun’s alleged ex-girlfriend, who has claimed to have proof of TRX manipulation.

Atkins refrained from discussing the specifics of the case, stating he couldn’t comment on particular enforcement issues but expressed willingness for further talks in a private setting if permitted by regulations.

Concerns Over Trump’s Associations with Binance

Lawmakers have also voiced alarm regarding other high-profile cases the SEC abandoned last year, notably against Binance, Ripple, Coinbase, Kraken, and Robinhood. In May 2025, the SEC terminated its lawsuit against Binance, filed in 2023 for offering unauthorized services and misrepresenting trading controls. It was later revealed that Trump granted a pardon to Zhao while a stablecoin related to WLF was utilized by an Abu Dhabi investment firm for a $2 billion stake in Binance.

Representative Stephen Lynch questioned, “How does this occur without any regulatory action? The damage to the SEC’s reputation is astonishing, and you are accountable for it. I request an explanation.”

Atkins defended the SEC, stating it continues to maintain robust enforcement and is pursuing legal actions. However, research from Cornerstone Research indicates that overall enforcement actions decreased by 30% in 2025, with a 60% drop in crypto-related cases.

Taking over in April 2025 after the departure of Gary Gensler, Atkins is perceived as advocating a shift away from aggressive tactics towards a more balanced regulatory approach.