Democrats are turning their fire on the Securities and Exchange Commission after the agency quietly dropped its long-running lawsuit against Ripple and other companies.
They argue that a retreat from crypto enforcement threatens 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 at precisely the moment when political pressure from the industry has intensified.
The Ripple lawsuit, once emblematic of the SEC’s aggressive “regulation by enforcement” approach under former leadership, has become a symbol of what critics describe as a wholesale reversal in posture.
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.