Top Democrats Press SEC to Explain Enforcement Head Resignation

The resignation came amid reports that high-profile crypto firms tied to the Trump family businesses are being protected from prosecution over alleged crimes.

In a letter dated 30 Mar, Connecticut Senator Richard Blumenthal cited the connection to Tron’s Justin Sun. He noted that in 2023 the SEC had brought an enforcement action against Sun’s companies, including Tron, on allegations of fraud and market manipulation, wash trading, undisclosed endorsements and other violations of securities law.

Sun's investment in WLFI

"Facing federal prosecution, Mr. Sun began to buy into President Trump’s cryptocurrency ventures, first by purchasing millions of dollars' worth of the President’s memecoin, $TRUMP, which made Sun its largest holder and entitled him to a private dinner with the President," the letter said. Sun also invested in World Liberty Financial (WLFI), the digital asset venture co-founded by the Trump family.

Massachusetts Senator Elizabeth Warren, the top Democrat on the Senate Banking Committee, has also raised concerns about the 16 Mar resignation of Ryan, who had served only six months as the regulator’s top cop.

Accused of preferential treatment  

"Ryan's departure reportedly came as the Division of Enforcement was pursuing charges for fraud and other misconduct against parties close to President Trump, including Justin Sun, but faced resistance from you and other senior appointees," the letter said.

The Democrats have accused the SEC of abandoning its neutral stance as a watchdog to favour allies of the Trump administration. The regulator insists that it is undergoing a "critical course correction" after years of overzealous "regulation by enforcement" policies of the previous administration that it said stifled innovation in the digital assets sector.