Senator Richard Blumenthal (D-CT) has sent a formal letter to SEC Chairman Paul Atkins demanding records and communications related to enforcement decisions involving cryptocurrency companies. The senator is specifically focused on whether firms connected to President Donald Trump‘s cryptocurrency interests received preferential treatment from regulators. The inquiry centers on a recent settlement involving Tron founder Justin Sun, whose fraud charges were dismissed earlier this month in exchange for a $10 million civil penalty.
Blumenthal’s letter also raises concerns about the departure of Margaret Ryan, who served only six months as director of the SEC’s Division of Enforcement before leaving the agency. The senator wrote that her brief tenure and abrupt exit raise questions, particularly given reports that senior leadership intervened to prevent the Division of Enforcement from pursuing cases against certain cryptocurrency companies. Ryan stepped down approximately 11 days after the SEC dismissed fraud charges against Sun and his affiliated firms.
The SEC originally charged Sun and his companies with securities violations in March 2023. Charges were also filed against several public figures, including Jake Paul, Lindsay Lohan, and Aliaune “Akon” Thiam, among others, for failing to disclose that they had been paid to promote Tron-related cryptocurrency tokens. The cases drew significant attention at the time as part of a broader regulatory push against alleged misconduct in the crypto sector.
Blumenthal’s letter highlights what he describes as a pattern of financial ties between Sun and Trump’s cryptocurrency ventures. According to the senator, Sun purchased millions of dollars worth of the president’s memecoin, $TRUMP, becoming its largest holder and earning an invitation to a private dinner with the president. Sun and his firms subsequently became early investors in World Liberty Financial (WLFI), the Trump family’s broader cryptocurrency venture, contributing tens of millions in support to its governance token and its stablecoin, USD1.
The SEC has closed several other high-profile crypto enforcement cases since Trump returned to office. The agency ended its lawsuit against Coinbase in February 2025, moved to dismiss its case against Binance and founder Changpeng “CZ” Zhao in May 2025, and dropped appeals in its long-running dispute with Ripple over XRP in August 2025. Trump has also granted clemency to prominent crypto figures, including Zhao and BitMEX founder Arthur Hayes.
Blumenthal has asked the SEC to deliver the requested documents to the Senate Permanent Subcommittee on Investigations by April 13. His request includes records related to Zhao’s case and any communications between the chairman’s office and members of the Trump or Witkoff families concerning cryptocurrency businesses. The letter represents a formal escalation of Democratic scrutiny over the agency’s regulatory posture.
Blumenthal’s inquiry follows earlier criticism from House Democrats, including Representatives Maxine Waters, Brad Sherman, and Sean Casten, who warned in January that the SEC’s retreat from enforcement actions raised concerns about political influence over regulatory decisions. In February, Democratic lawmakers further criticized Atkins over the handling of cases involving Binance and Sun. Representative Stephen Lynch (D-MA) told Atkins during a House Financial Services Committee hearing that the agency’s approach was damaging public trust and harming both consumers and the broader reputation of the crypto industry.
Originally reported by Decrypt.
