The Democrats are turning their fire on the Securities and Exchange Commission (SEC), a highly powerful US regulator, after the agency ditched its long-running cases against Ripple and other companies.
They argue that this sudden retreat jeopardizes investor protection and the credibility of U.S. markets.
A sharply worded letter
In a scathing letter to SEC Chairman Paul S. Atkins, Democratic lawmakers accuse the Commission of abandoning meritorious crypto cases due to pressure from the increasingly powerful cryptocurrency industry.
The Ripple lawsuit is emblematic of the SEC’s aggressive “regulation by enforcement” approach under former Chair Gary Gensler. The long-lasting legal battle officially ended on Dec. 22.
Since January 2025, the SEC has dismissed or closed at least a dozen crypto-related enforcement actions, including cases against Binance, Coinbase, Kraken, and Ripple.
Lawmakers argue that this pattern is not coincidental. They point to an unprecedented surge in crypto industry lobbying and political donations. To Democrats, the timing creates what they describe as an “unmistakable inference” of pay-to-play.
Coinbase and Kraken followed a similar arc. In both cases, courts found that the SEC had plausibly alleged securities violations involving crypto tokens and platform operations. Both cases survived motions to dismiss. Yet both were ultimately dropped in 2025 due to the SEC trying to reform its approach.
Democrats reserve their sharpest criticism for the SEC’s handling of the case against Justin Sun, founder of Tron. The allegations against him were later bolstered by parallel civil litigation and settlements with celebrity promoters. Yet in February 2025, the SEC asked the court to pause the case to explore settlement talks.
The timing, lawmakers argue, is alarming. Sun has poured tens of millions of dollars into White House-affiliated crypto ventures. They warn that failing to pursue Sun aggressively would further undermine trust in the SEC’s independence.
"The SEC’s case was not speculative or marginal—it was built on a rigorous investigation that resulted in detailed allegations of systematic securities violations confirmed by judicial rulings and co-defendant settlements. No adverse rulings or negative developments had impaired the SEC’s position prior to the stay," the letter says.
Alex Dovbnya
Caroline Amosun
Denys Serhiichuk
Godfrey Benjamin