U.S. securities regulators have been under more strain than ever from critics this time around on rollbacks of cryptocurrency regulation, and a key senator asks whether they have internal information on any new stock trading or SEC policy decisions.
Senator Richard Blumenthal, the top Democrat on the Senate investigations subcommittee, has written to SEC Chairman Paul Atkins to share records and exchanges related to the government’s high-profile digital asset cases, including the dismissal of its claims against Tron founder Justin Sun.
Blumenthal’s request comes weeks after the SEC’s interim head of enforcement, Judge Margaret Ryan, departed. Ryan commenced the job near the end of 2025 and left in March of this year.
According to reports, Ryan was seeking to delve more deeply into pursuing fraud charges involving those in President Donald Trump’s inner circle. However, people familiar with the matter say he faced a setback because Atkins and other top Republicans on the commission opposed it.
“Ms. Ryan’s abrupt departure from the agency raises questions in light of her short tenure and reports that senior leadership intervened to prohibit the Division of Enforcement from pursuing cases against certain cryptocurrency companies,” Blumenthal said in the letter.
SEC drops high-profile crypto cases amid allegations of political influence
According to reports, tensions have risen over Sun’s case. During the Biden administration, the SEC charged Sun and his three affiliated companies with conducting unregistered sales of $TRX and BTT tokens. Charges that stood against him also included manipulating $TRX prices through wash trading and paying celebrities, including actress Lindsay Lohan and influencer Jake Paul, to promote the tokens without proper disclosure.
Under the Trump administration, the SEC dropped several high-profile cases against major crypto firms, including Coinbase and Kraken, which had been accused of failing to register correctly. In May, the agency also dismissed charges against Binance after alleging the platform had misrepresented its trading controls.
Just this month, the watchdog has thrown out charges against Sun, the Tron Foundation, and BitTorrent (now Rainberry) and ordered the latter to pay a $10 million civil penalty to the agency. Sun has been a vocal supporter of Trump and has made huge investments in Trump-family-backed crypto ventures, including World Liberty Financial and Trump’s memecoin $TRUMP.
“This is a clear example of how President Trump’s blatant crypto corruption creates back doors for his family’s business partners, creating a pay-to-play enforcement regime that turns a blind eye to grave threats to national security and consumer protection,” Blumenthal said in the letter.
Moreover, according to Blumenthal’s letter, Ryan’s short tenure raises concerns that political actors (in particular, the White House) influenced the decision not to approve or decline certain cryptocurrency cases.
The senator is also looking for communications between senior SEC officials and industry leadership partners, including the developers who run World Liberty Financial, now a cryptocurrency company supported in part by President Trump supporters, said Blumenthal.
Critics say the SEC’s recent enforcement approach, which was so aggressive earlier, has brought dozens of crypto‑related enforcement decisions in a single year and has since transitioned to a more lenient or selective approach. Under former SEC Chair Gary Gensler, there were 46 crypto‑related enforcement efforts in 2023 alone, the best year on record for the agency.
Legal experts note the pivot has been noticeable: after a series of disputes with the biggest platforms, the SEC in 2025 dismissed or paused litigation against several crypto firms, particularly exchanges and trading platforms, amid a major regulatory focus.
Blumenthal probes SEC shift as lawmakers scrutinize crypto oversight
The tone has shifted sharply throughout Washington. Supporters of the newly adopted SEC structure say that explaining the rules could bring innovation and clarity, and that enforcement will be lower at firms that comply with disclosure and registration requirements. Opponents argue that weakening enforcement could put investors’ interests at risk and grant bad actors impunity.
Blumenthal’s inquiry probes into the reasons behind this shift. In his letter, he specifically asked for SEC communications regarding potential enforcement against crypto companies, including interactions with political appointees or outside actors.
He expressed deep concern and discomfort with the abrupt leadership change and enforcement decisions that impose strict limits on the agency’s ability to prosecute corporate crimes in the fast‑paced digital asset space.
Industry reactions are mixed. Crypto advocates are betting that we are taking a step forward rather than moving from legal war to a firm rule-making scheme, and that, through various initiatives, they will see how different tokens and business models apply to rules in U.S. securities law.
For now, Blumenthal asked Atkins to provide records and communications between the SEC’s enforcement division and its leadership by April 13th. He has also requested records between his office and any member of the Trump family.
And so lawmakers and regulators alike will be closely watching as this record request goes out, to see how the SEC will balance innovation with its basic function of protecting customers.
