At a recent congressional hearing, Chair of the U.S. Securities and Exchange Commission (SEC), Paul Atkins, found himself under scrutiny for his ties with crypto entrepreneur Justin Sun and a memecoin linked to former President Donald Trump. Atkins, who has been in office for less than a month, was questioned about his stance on crypto regulation, the SEC’s halted fraud case against Sun, and recent transactions involving Trump-associated digital currencies.
During the House Appropriations Committee meeting, which supervises the funding of federal agencies, Rep. Glenn Ivey, a Democrat from Maryland, highlighted certain events preceding Trump’s January inauguration. He noted that Tron, a company owned by Sun, had purchased $30 million in tokens from World Liberty Financial—a DeFi company supposedly inspired by the former president.
Subsequently, the SEC decided to suspend its fraud lawsuit against Sun and his businesses, including Tron, effectively putting it on hold. Alongside this, a memecoin associated with Trump has been in circulation, and a special gala for the top 220 memecoin holders is planned for later this week. Sun declared his participation as one of these holders in a post on X early Tuesday. “Delighted to back @POTUS and thankful for the invitation from @GetTrumpMemes to attend President Trump’s Gala Dinner as his TOP fan!” Sun posted.
Ivey expressed concern over these events, stating, “This, in my opinion, reeks of impropriety. I would hope that the SEC is looking into this matter.” Atkins referred to Sun’s case as an “active case” and emphasized that the SEC does not classify memecoins as securities.
Atkins, appointed by Trump, has announced a “new day” for the SEC after the previous chair, Gary Gensler, adopted a less welcoming attitude towards the crypto industry. Gensler’s tenure saw a cautious approach to crypto and multiple charges against industry leaders. Many of these cases were later dismissed. Atkins declared in his prepared testimony that his approach to crypto regulation would be through notice and comment rulemaking rather than regulation through enforcement.
During the hearing, Rep. Chuck Edwards, a Republican from North Carolina, asked Atkins about the funding requirements of the SEC’s new crypto task force. Led by Commissioner Hester Peirce, the task force was established earlier this year by former acting chair Mark Uyeda with a mission to conduct industry roundtables and clarify application of securities laws to crypto. “I’m not entirely sure,” Atkins replied, “It’s staffed by current employees and Commissioner Peirce is leading it, so it doesn’t require any additional funding.”
Disclaimer: The Block is an independent news outlet that provides news, research, and data. As of November 2023, Foresight Ventures is a majority investor of The Block. Foresight Ventures invests in other companies in the crypto space. Crypto exchange Bitget is an anchor LP for Foresight Ventures. The Block operates independently and aims to deliver objective, timely, and impactful information about the crypto industry. This article is not meant as legal, tax, investment, financial, or other advice.
