SEC Under Fire Over Sharp Drop in Crypto Cases

Lawmakers specifically pointed to a reported 60% drop in cases and the dismissal of high-profile lawsuits like the agency’s case against Binance. Democrats, including Representatives Stephen Lynch and Maxine Waters, raised concerns about weakened oversight, potential political motivations behind dropped cases, and foreign investment tied to Trump-linked crypto ventures like World Liberty Financial.

Crypto Crackdown Slows

US lawmakers pressed Securities and Exchange Commission (SEC) Chair Paul Atkins during a congressional hearing on Wednesday, and raised concerns over a sharp decline in crypto-related enforcement actions and the dismissal of several high-profile cases since the change in leadership under President Donald Trump.

Representative Stephen Lynch, a Democrat from Massachusetts, said enforcement actions have fallen by roughly 60% since Trump took office and appointed Atkins to lead the agency. Lynch pointed to the SEC’s decision in May of 2025 to move to dismiss its lawsuit against Binance as an example of what he described as a retreat from crypto oversight. He argued that pulling back on enforcement risks undermining investor confidence at a time when the digital asset market is already facing volatility.

Lynch also raised alarms about foreign investment tied to World Liberty Financial, a decentralized finance platform reportedly linked to the Trump family. According to recent reports, Aryam Investment 1, an Abu Dhabi-based investment vehicle backed by UAE national security adviser Sheikh Tahnoon bin Zayed Al Nahyan, acquired a 49% stake in the startup behind WLFI. Lynch suggested that such foreign involvement, along with meme coins launched by Trump family affiliates, poses reputational and national security concerns.

He added that the reputational damage to the SEC itself could further weaken market confidence. However, Atkins pushed back against claims that the agency softened its stance. “We have a very robust enforcement effort, and we are bringing cases,” he said, and rejected the notion that the agency abandoned oversight of the sector.

The exchange revived earlier criticism from Democratic lawmakers regarding the Trump family’s growing involvement in the crypto space. Some Democrats argued that such ties could create conflicts of interest or open avenues for foreign influence over US policy. The issue is particularly sensitive as the country heads into a midterm election year, with control of Congress potentially at stake.

Representative Maxine Waters of California, who is a longtime critic of both Trump and the cryptocurrency industry, accused the administration of politically motivated decisions to drop cases. She claimed that several lawsuits were dismissed despite the SEC having made progress in court, suggesting that the enforcement program was legally sound.

Waters also alleged that crypto executives who benefited from pardons or regulatory relief contributed millions of dollars to Trump and his family. She has repeatedly called for investigations into the president’s family-linked crypto ventures, and described them as potential vehicles for foreign entities to exert influence over the executive branch.

While Republicans lean towards a lighter regulatory touch, Democrats warned that scaling back enforcement could expose consumers to fraud and weaken national security safeguards.