Crypto News: SEC Showdown Explodes as Justin Sun Case Sparks Political Storm

Key Insights:

• Crypto news spotlight intensifies as lawmakers clash over SEC pause in Justin Sun case.
• SEC shift from crypto enforcement divides Democrats and Republicans.
• Stablecoin oversight advances while Sun probe shapes broader crypto policy debate.

Crypto news took over a tense U.S. House hearing as lawmakers pressed Paul Atkins on the agency’s halted enforcement case against Justin Sun. The session turned into a political dispute. Democrats challenged the agency’s retreat from earlier crypto cases, while Republicans questioned how fast the SEC plans to advance new digital-asset rules.

Atkins said he could not discuss the paused action involving Sun or his Tron Foundation, but he agreed to consider a confidential briefing for lawmakers.

Crypto News: Political Pressure Builds Over Justin Sun Case

The dispute over Justin Sun’s investigation impacted the tone of the hearing. Maxine Waters pressed Atkins on why the agency halted its 2023 action. The SEC had accused Sun of directing more than 600,000 wash trades to boost TRX trading volume.

The agency paused the matter last year while evaluating a potential resolution. However, no outcome has been announced. Waters said Sun maintained connections to entities tied to President Donald Trump.

She referenced World Liberty Financial Inc., noting Sun’s links to the Trump family. She cited public claims from an alleged former girlfriend of Sun, who suggested she held evidence of TRX manipulation.

However, following the news, spokespeople for Sun and the Tron Foundation did not respond to requests for comment during the hearing. Atkins repeated that the rules barred him from discussing individual cases.

He said he would meet privately with lawmakers “to the extent the rules allow.” He added that the SEC focuses on conduct involving securities. This response followed questions about whether the agency’s shift away from earlier crypto enforcement matters affected investor protections.

SEC Direction Splits Lawmakers as Crypto News Takes Center Stage

Democrats criticized the agency for abandoning several high-profile crypto initiatives. According to crypto news, the SEC dismissed enforcement cases involving Binance, Ripple, Coinbase, Kraken, and Robinhood last year. Atkins said the agency was moving away from its previous regulation-by-enforcement pattern.

Crypto News Sparks Regulatory Clash | Source: X

Republicans took a different approach. They focused on how the SEC and the Commodity Futures Trading Commission plan to define jurisdiction boundaries. Atkins said both agencies were advancing rules in line with the Clarity Act, which passed the House but faces delays in the Senate.

He added that new guidance would help companies understand regulatory assignments between the SEC and CFTC.

He also mentioned the Project Crypto initiative. The joint effort is intended to align the agencies’ frameworks for market structure and oversight. He said the work continues despite slow movement in the Senate.

Regulators Move Ahead on Stablecoin Oversight

As the Sun case fueled political tension in crypto news, other regulators pushed ahead with stablecoin policies.

The CFTC revised an earlier “no-action” letter. The update clarified that national trust banks can issue payment stablecoins and that tokenized collateral from those banks qualifies under existing rules. This change aligns with the new U.S. stablecoin approach.

Meanwhile, the National Credit Union Administration proposed a process by which firms to seek to become stablecoin issuers. The plan accompanies the implementation of the GENIUS Act, which was a key piece of legislation for the digital-asset sector.

These regulatory steps increased the interest in the manner in which the SEC and Senate will proceed in market-structure rules. Many lawmakers said the Sun case is now at the center of that discussion.

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