SEC Chair Criticized by Democrats
During a hearing on Wednesday, members of the Democratic party fiercely criticized Securities and Exchange Commission (SEC) Chair Paul Atkins, alleging that his agency has neglected oversight of cryptocurrency frauds linked to former President Donald Trump. They argue this inattention undermines both consumer trust and the integrity of the crypto industry, which has seen a massive plunge of over one trillion dollars in market value recently.
Concerns Raised by Representatives
Rep. Stephen Lynch from Massachusetts expressed his concerns directly to Atkins, stating,
“People are losing trust. This is detrimental not only to cryptocurrency but particularly harmful to consumers.”
He went further to highlight the reputation challenges facing the SEC right now.
Lynch referenced the SEC’s decision to drop various lawsuits against significant crypto exchanges, especially Binance, which has been pivotal in boosting the fortunes of the Trump family’s crypto venture, World Liberty Financial. Notably, in October, President Trump granted clemency to Binance’s founder, Changpeng Zhao, who had previously served four months in prison for breaching U.S. money laundering regulations.
Controversial SEC Decisions
Additionally, Rep. Maxine Waters from California took aim at Atkins regarding the SEC’s controversial choice last year to halt its lawsuit against Justin Sun, a crypto billionaire known for founding the Tron platform. The lawsuit accused Sun of offering unregistered securities and market manipulation involving the cryptocurrency TRX. This pause came shortly after Sun’s acquisition of a substantial number of Trump family-related WLFI tokens worth $75 million. Furthermore, Sun had previously been among the largest holders of Trump’s meme coin, an association that allowed him to dine privately with Trump earlier in the year.
Allegations of Insider Trading
In a twist, a woman claiming to be Sun’s ex-girlfriend recently alleged she possesses credible evidence of his involvement in insider trading and manipulation schemes, which she claims to have reported to the SEC. In response to Waters’ inquiries regarding the investigation into these new allegations, Atkins maintained silence, not offering any comments on Sun or the ongoing lawsuits raised during the proceedings.
Impact on Investor Confidence
During the session, House Democrats argued that the SEC’s lax regulatory measures are partly responsible for the erosion of confidence among investors following the cryptocurrency market’s historic downturn. Prominent crypto advocates, typically supportive of Trump, have begun vocalizing concerns about the repercussions of his private cryptocurrency endeavors, one of whom lamented,
“He literally used his voting base as exit liquidity. This is not the behavior of an actual leader.”
