US Lawmakers Flag “Pay-to-Play” Fears as SEC Drops 12 Crypto Cases, Pauses Justin Sun Probe

Key Takeaways:

• US lawmakers say the SEC has dropped or closed at least 12 crypto enforcement cases since early 2025, including major actions against Binance, Coinbase, and Kraken.
• They argue the pullback overlaps with tens of millions of dollars in political spending by crypto firms tied to President Trump and his affiliates.
• The paused enforcement case against Tron founder Justin Sun has become a focal point, raising concerns over selective enforcement and regulatory capture.

Three senior House Democrats are pressing for answers from the Securities and Exchange Commission over what they say is an abrupt reversal in crypto enforcement. The legislators, in a letter to SEC Chairman Paul Atkins, said recent moves could put at risk both protection and the perception that has gone with the involvement of investors in the American cryptocurrency market.

More than a dozen cases of enforcement actions in crypto products have been dismissed or closed at the SEC since January of 2025. According to the lawmakers, this includes cases where the agency had already survived motions to dismiss and secured favorable court rulings.

Some of the most dramatic stays of judgment were in suits against Binance, Coinbase, and Kraken. Each of these instances involved a determination by a federal judge that the SEC had plausibly alleged violations of the securities law, including engaging in unregistered exchanges and the sale of investment contracts. Despite these preliminary determinations, the agency ultimately dismissed.

The legislators argue that failing to take up these matters with good cause would present a dangerous signal. They say it raises many unanswered questions about whether cryptocurrency exchange platforms were legal under existing securities laws and whether investors who were harmed by past activities can ever get justice.

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The letters point to the extent to which these cases had advanced before being abandoned.

For instance, in the case of Binance, it was alleged that fraud, conflict of interest, and circumvention of US regulatory laws were involved. A federal judge allowed all except for the dismissal to go forward because the judge felt that the SEC plausibly pleaded securities law violations regarding the sale and staking activities. However, the SEC did dismiss this case with prejudice in mid-2025.

Coinbase and Kraken followed a similar path. These courts refused their dismissal requests, as they held that, at least for tokens traded on their platforms, these tokens could be construed as securities under US Regulatory Law. Yet the SEC later agreed to dismiss both cases, saying the decisions were tied to broader efforts to rethink its crypto approach rather than the merits of the claims.

Lawmakers argue that abandoning cases after clearing such legal hurdles weakens the credibility of US crypto oversight.

A central theme of the letter is timing. The lawmakers say the SEC’s enforcement pullback coincided with a surge in political donations from crypto companies and executives.

They cite estimates showing crypto firms donated at least $85 million to President Trump’s reelection campaign. Companies whose SEC cases were dismissed in 2025, including major exchanges and crypto platforms, reportedly contributed at least $1 million each to Trump’s inauguration.

The letter argues that this overlap creates what it calls an “unmistakable inference” of pay-to-play dynamics, where political influence may be shaping enforcement decisions. While the lawmakers stop short of alleging direct wrongdoing, they say the appearance alone risks eroding trust in regulators.

The paused enforcement action against Tron founder Justin Sun has become the clearest test of the SEC’s current posture. Unlike Binance, Coinbase, and Kraken, Sun’s case has not been dismissed; rather, it has been stayed since February 2025.

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In 2023, the SEC filed suit against Sun for, allegedly, orchestrating the unregistered offering of crypto securities, conducting manipulative transactions in tokens through wash trades, and compensating celebrities to endorse tokens without adequate disclosure. Years of wrongdoing involving TRX and BTT tokens were alleged.

However, the specifics in the lawsuit, the SEC requested the court stay the action in order to negotiate a possible settlement. Lawmakers say that request came shortly after Sun invested more than $75 million in Trump-linked crypto ventures, including World Liberty Financial and Trump-branded tokens.

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