The three Democratic House lawmakers warned that if the U.S. Securities and Exchange Commission leaves the case against the founder of Tron unresolved, it could "undermine investor confidence in financial regulators."
The three Democratic House lawmakers are pressuring SEC Chairman Paul Atkins to provide information regarding the agency's closure of investigations, dismissal of enforcement actions, or the postponement of "at least a dozen crypto-related cases" by extending the pause, including the case of Tron founder Justin Sun.
In a letter to Atkins on Thursday, Representatives Maxine Waters, Brad Sherman, and Sean Casten questioned the SEC's "priorities and effectiveness" after it dismissed these crypto-related cases. The lawmakers pointed out that the agency has "publicly and boldly dismissed the majority of crypto enforcement cases," including those involving cryptocurrency exchanges Binance, Coinbase, and Kraken.
However, the main content of this letter is to urge the SEC to consider reopening the case against Justin Sun. In February of this year, the agency's lawyers requested the federal court to suspend the enforcement action against the Tron founder to explore potential solutions.
Waters, Sherman, and Casten questioned Justin Sun's relationship with China, stating that the dismissal of the case "may be part of a quid pro quo," as the Tron founder purchased millions of dollars worth of tokens from World Liberty Financial, which received support from President Donald Trump and his sons. There is currently no public evidence that these token purchases influenced the SEC's decision, and the agency has not commented on the allegation.
"The SEC's decision to seek a suspension of its strong case against Justin Sun [...] threatens investor confidence in the SEC," the letter added:
"Without a strong, independent SEC, capital formation will undoubtedly be harmed, and our real economy will be as well. The SEC's request to suspend the Justin Sun case (which has now lasted for 11 months) sends a signal to the market that securities laws are being selectively enforced, and those with enough political influence can evade accountability."
The three lawmakers asked the SEC to preserve and provide all documents and communications regarding its decisions in the Justin Sun case. Cointelegraph reached out to the SEC and Justin Sun's spokesperson for comment, but had not received a response by the time of publication.
In December of last year, Waters called for a hearing by the House Financial Services Committee Chairman French Hill to investigate what she described as the SEC's "rapid, significant, and questionable policy shifts during the Trump administration." She specifically mentioned the agency's termination and suspension of enforcement actions against cryptocurrency companies.
Casten also co-signed a letter with Senator Jeff Merkley in September to Atkins, questioning the SEC's decision to drop the Justin Sun case.
The SEC has no Democratic commissioners after Crenshaw's departure.
Caroline Crenshaw, the last Democratic commissioner, left the SEC earlier this month. Her departure leaves the agency with only three Republican commissioners: Mark Uyeda, Hester Pierce, and Atkins.
Reportedly, as of Thursday, Trump has not announced any potential nominees to fill the two vacant commissioner positions, nor has he proposed a plan to maintain bipartisan balance in the agency by nominating Democrats.
The Commodity Futures Trading Commission (CFTC) also faces a similar predicament, with the only currently serving commissioner, Michael Selig, being a Republican appointed by Trump. The CFTC's leadership typically consists of five commissioners confirmed by the Senate.