Senator Questions SEC Over Treatment of Trump-Linked Crypto Businesses

Senator Richard Blumenthal wants the agency to answer whether it softened enforcement against allies of President Donald Trump.

In brief

• Senator Richard Blumenthal asked the SEC whether allies of President Donald Trump in crypto received favorable treatment.
• His inquiry focuses on the SEC’s dismissal of fraud charges against Tron founder Justin Sun.
• The letter comes as the SEC has closed or dropped multiple crypto cases and Trump has issued pardons to industry figures.

Senator Richard Blumenthal (D-CT) is pressing the U.S. Securities and Exchange Commission for answers about whether individuals and companies tied to President Donald Trump’s cryptocurrency ventures received preferential treatment from regulators.

In a letter to SEC Chairman Paul Atkins on Monday, Blumenthal requested records and communications related to enforcement decisions involving cryptocurrency firms, including companies linked to Tron founder Justin Sun, after the agency dismissed fraud charges against Sun and several of his companies earlier this month in a settlement that included a $10 million civil penalty.

Bluenthal’s letter also questioned the departure of Margaret Ryan, who had served only six months as director of the SEC’s Division of Enforcement before leaving the agency.

“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 wrote. “Indeed, on March 5, 2026, approximately 11 days before Ms. Ryan stepped down from her position, the SEC dismissed fraud charges against Mr. Sun and several of his companies after he agreed to pay a $10 million fine.”

In March 2023, the SEC charged Sun and his companies with securities violations. Charges were also filed against several influencers, Jake Paul, Lindsay Lohan, Aliaune “Akon” Thiam, and adult film star Michelle "Kendra Lust" Mason, for not disclosing they were paid to promote Tron-related cryptocurrency tokens.

“Facing federal prosecution, Mr. Sun began to buy into President Trump’s cryptocurrency ventures, first by purchasing millions of dollars worth of the President’s memecoin, $TRUMP, which made Sun its largest holder and entitled him to a private dinner with the President,” Blumenthal wrote. “Mr. Sun and his firms then went on to become an early investor in the Trump family’s larger cryptocurrency venture, World Liberty Financial (WLFI), providing tens of millions in support to WLFI’s governance token and its stablecoin, USD1.”

Blumenthal’s letter comes after the SEC ended multiple high-profile cases originally brought during the Joe Biden administration. The agency closed its lawsuit against Coinbase in February 2025, moved to dismiss its case against Binance and founder Changpeng “CZ” Zhao in May 2025, and ended appeals in its long-running dispute with Ripple over XRP in August 2025. At the same time, Trump has granted clemency to several prominent figures in the cryptocurrency industry, including CZ and BitMEX founder Arthur Hayes.

Blumenthal asked the SEC to provide the requested records to the Senate Permanent Subcommittee on Investigations by April 13, and to include any documents related to Zhao's case as well. The senator is also seeking records of contacts between the chairman’s office and members of the Trump or Witkoff families regarding cryptocurrency businesses.

Blumenthal’s request adds further criticism from Democratic lawmakers over the SEC’s approach to crypto enforcement since Trump returned to office.

In January, House Democrats, including Representatives Maxine Waters, Brad Sherman, and Sean Casten, warned that the agency’s retreat from enforcement actions raised concerns about political influence over regulatory decisions. This was followed in February, when Democratic lawmakers criticized Atkins for easing enforcement against Binance and Justin Sun, accusing the SEC of enabling reputational damage and undermining market integrity.

“People are losing trust,” Rep. Stephen Lynch (D-MA) told Atkins during a hearing before the House Financial Services Committee. “This is not good for crypto, it’s certainly not good for consumers. The reputational damage the SEC is suffering right now.”

The office of Senator Blumenthal did not immediately respond to Decrypt's request for comment.

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