SEC Chair Atkins Faces Democratic Criticism Over Crypto Case Dismissals
During a Wednesday hearing before the House Committee on Financial Services, Democratic members raised questions about the shift toward crypto-friendly regulation under Trump's administration.
During a Wednesday hearing, members of Congress from the Democratic Party pressed Securities and Exchange Commission (SEC) Chair Paul Atkins regarding the regulatory agency's enforcement approach toward the cryptocurrency sector and the reasoning behind multiple case dismissals following the recent change in leadership.
According to Representative Stephen Lynch, enforcement activities have experienced a 60% reduction since US President Donald Trump took office and designated Atkins to lead the SEC as its chair.
The Democratic representative from Massachusetts pointed to the withdrawal of multiple SEC legal actions targeting the cryptocurrency sector, including the agency's decision to file a motion dismissing the Binance lawsuit in May 2025, as illustrations of abandoned enforcement proceedings.
Lynch further raised concerns regarding international capital flowing into World Liberty Financial (WLFI), a decentralized finance project with connections to the Trump family, as well as meme-based tokens introduced by family members.
According to recent reporting, Aryam Investment 1, an investment entity from Abu Dhabi supported by Sheikh Tahnoon bin Zayed Al Nahyan, who serves as the United Arab Emirates (UAE) national security adviser, acquired a 49% stake in the startup organization operating WLFI. Lynch stated:
This is hurting the crypto industry, all these scams. Look at crypto today. I think it's down 25% in the last month. People are losing trust, and it's not good for crypto. It's certainly not good for consumers, and it's awful the reputational damage that the SEC is suffering.
Atkins countered by saying, "We have a very robust enforcement effort, and we are bringing cases." These exchanges reiterated earlier objections raised by Democratic members of Congress regarding the Trump family's cryptocurrency ventures and potential implications for US national security interests.
These statements arrive during a year when US midterm elections are taking place and may indicate Democratic opposition to cryptocurrency initiatives, which has the potential to obstruct market structure legislation should the Democratic Party regain majority control of one or both chambers of Congress.
Representative Maxine Waters asserts crypto sector pardons and withdrawn legal cases have political motivations
California Representative Maxine Waters remarked, "These cases were dismissed, despite the fact that the SEC was winning in court, proving that the SEC's crypto enforcement program was well-grounded in the law."
Waters went on to say that cryptocurrency sector leaders who received benefits from the pardons and the discontinued regulatory legal proceedings contributed "millions of dollars" to Trump and members of his family.
Waters, who maintains a position as an outspoken opponent of both Trump and the cryptocurrency sector, has consistently advocated for investigations into the president's family's involvement in cryptocurrency ventures, describing these projects as a possible indirect channel for international actors to shape Executive Branch policies through financial incentives.