Democrat lawmakers at a House Financial Services Committee hearing grilled U.S. SEC Chair Paul Atkins over the agency’s 60% drop in enforcement action since he took office. The hearing also touched on links between President Donald Trump’s family and several crypto ventures, flagging Trump family-tied memecoins as areas of concern.
Massachusetts Democrat Rep. Stephen Lynch pointed out a few U.S. SEC lawsuit dismissals in cases against the crypto industry, citing the May 2025 U.S. SEC dismissal of the Binance case as one of many examples of dropped enforcement. California Representative Maxine Waters also noted that many of these cases were thrown out of court despite the fact that the U.S. SEC was winning.
According to Rep. Waters, these dismissals are proof that the agency’s crypto enforcement program was well-grounded in the law before Atkins’ appointment. However, in response, the agency’s chair emphasized that the Commission has put in place a robust enforcement effort and is still bringing cases. He maintained that the U.S. SEC remains committed to pursuing enforcement where warranted.
Lawmakers fear U.S. SEC enforcement drop linked to national security
A notable development cited in the discussion involved the link between Abu Dhabi-based Aryam Investment 1, backed by Sheikh Tahnoon bin Zayed Al Nahyan, and Trump family-backed World Liberty Financial (WLFI). Aryam Investment 1 allegedly has a 49% stake in the startup behind WLFI.
In this regard, Rep. Lynch argued that such ties could undermine trust in the crypto sector and complicate consumer protection. Democratic lawmakers have repeatedly raised concerns about the Trump family’s involvement in the crypto space and its potential to compromise U.S. national security.
Cryptopolitan previously reported that Atkins, appointed by Trump, ended aggressive U.S. SEC enforcement for technical violations. The agency also dropped several crypto investigations tied to Trump donors.
Rep. Waters, a well-known vocal critic of crypto and Trump, noted that nearly all of the crypto industry moguls who benefited from the dismissed regulatory suits and the pardons dished out millions of dollars to POTUS and his family. She described Trump’s family’s involvement in the crypto space as a potential backdoor for foreigners to bribe officials to influence Executive Branch policy.
U.S. SEC enforcement shrinks under Trump and Atkins
A recent Cornerstone Research report showed that 2025, which marked Paul Atkins’s first phase of tenure as the agency’s chair, saw a decline in crypto enforcement by the U.S. SEC, with only 13 actions initiated in 2025 after bringing a total of 33 crypto-related actions in 2024. 5 of the 13 actions were brought under former U.S. SEC chair Gary Gensler before he left office in January. Specifically, seven out of the 29 actions resolved in 2025 were dismossals under Atkins.
Meanwhile, monetary fines imposed in 2025 against crypto market participants dropped to $142 million, representing less than 3% of the penalties imposed in 2024. The report noted that the U.S. SEC’s focus has shifted away from broad registration theories and toward fraud cases grounded in clear consumer harm, which are easier to argue in court.
Robert Letson, a principal at Cornerstone Research and one of the report’s authors, also noted that the drop in enforcement actions under Chair Atkins’ tenure reflects a shift in the U.S. SEC’s approach to digital asset oversight. Letson added that his research firm will continue to watch digital asset regulation closely as it evolves in 2026, consistent with the priorities laid out in early 2025.
According to Cornerstone Research, legal observers have tracked a broader reset in tone across the U.S. SEC since the leadership change in April 2025, when Atkins took office. However, the research firm also observes that the next phase of U.S. crypto oversight may hinge more on the regulatory guidance or negotiated standards the agency chooses to bring to the table in 2026, rather than on surprise lawsuits.
