Blumenthal Demands Answers from SEC Chairman over Preferential Treatment of Trump Crypto Backers

Blumenthal’s letter follows reports that Division of Enforcement Director left post after facing pressure from Trump officials to drop fraud charges against Trump crypto ally Justin Sun
[WASHINGTON, D.C.] – U.S. Senator Richard Blumenthal (D-CT), Ranking Member of the Senate Permanent Subcommittee on Investigations, today wrote to Paul Atkins, Chairman of the U.S. Securities and Exchange Commission (SEC), demanding answers about recent reports that the SEC may have exercised preferential treatment for financial partners of President Trump against the advice and warnings of senior staff.
Recent reporting fromReutersrevealed that Margaret Ryan, a civil servant who served as the agency’s Director of the Division of Enforcement, left her role shortly before the SEC dismissed fraud charges against Justin Sun, a key partner in the Trump family’s cryptocurrency ventures. In his letter to Atkins, Blumenthal raised concerns about Ryan’s abrupt departure and reports that senior leadership may have intervened to prohibit the Division of Enforcement from pursuing cases against parties close to President Trump.
“[O]n March 5, 2026, approximately 11 days before Ms. Ryan stepped down from her position, the SEC dismissed fraud charges against Mr. Sun and several of his companies after he agreed to pay a $10 million fine,”Blumenthal wrote.
Blumenthal pointed out how Sun has sought to curry favor with President Trump by buying into Trump family cryptocurrency ventures:“The SEC initially based its 2023 enforcement action against Mr. Sun’s companies, including Tron, on allegations of fraud and market manipulation, wash trading, undisclosed endorsements, and other violations of securities law. 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. Mr. Sun and his firms then went on to become an early investor in the Trump family’s larger cryptocurrency venture, World Liberty Financial (WLFI), providing tens of millions in support to WLFI’s governance token and its stablecoin, USD1.”
Blumenthal continued,“In addition to Mr. Sun’s efforts to curry favor with the President, his company, Tron, is also controversial throughout the crypto ecosystem because of its role in facilitating a disproportionate amount of illicit finance, including money-laundering, sanctions evasion, and terrorism financing.”
“This is a clear example of how President Trump’s blatant crypto corruption creates back doors for his family’s business partners, creating a pay-to-play enforcement regime that turns a blind eye to grave threats to national security and consumer protection,”Blumenthal concluded.
As Ranking Member of PSI, Blumenthal is investigating the illicit use of cryptocurrencies, including by sanctioned entities. As part of his inquiry, Blumenthal is seeking records and communications between the SEC’s Division of Enforcement and the Office of the Chairman, records and communications between the Office of the Chairman and any member of the Trump or Witkoff families, records related to the SEC’s settlements with cryptocurrency companies, and more.
The full text of Blumenthal’s letter to Atkins isavailable hereand below.
Dear Chairman Atkins:
I write regarding reports that the Securities and Exchange Commission (“SEC”) may have exercised preferential treatment for financial partners of President Trump against the advice and warnings of senior staff when the agency declined to litigate credible fraud cases, including against Justin Sun, a key partner in the Trump family’s cryptocurrency ventures.[1]
On March 16, 2026, Margaret Ryan, a civil servant who served as the agency’s Director of the Division of Enforcement, left her role after merely six months on the job.[2]Her 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.[3]Ms. Ryan’s abrupt departure from the agency raises questions in light of her short tenure and reports that senior leadership intervened to prohibit the Division of Enforcement from pursuing cases against certain cryptocurrency companies.[4]Indeed, on March 5, 2026, approximately 11 days before Ms. Ryan stepped down from her position, the SEC dismissed fraud charges against Mr. Sun and several of his companies after he agreed to pay a $10 million fine.[5]
The SEC initially based its 2023 enforcement action against Mr. Sun’s companies, including Tron, on allegations of fraud and market manipulation, wash trading, undisclosed endorsements, and other violations of securities law.[6]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.[7]Mr. Sun and his firms then went on to become an early investor in the Trump family’s larger cryptocurrency venture, World Liberty Financial (WLFI), providing tens of millions in support to WLFI’s governance token and its stablecoin, USD1.[8]
In addition to Mr. Sun’s efforts to curry favor with the President, his company, Tron, is also controversial throughout the crypto ecosystem because of its role in facilitating a disproportionate amount of illicit finance, including money-laundering, sanctions evasion, and terrorism financing.[9]A report by the United Nations Office on Drugs and Crime revealed that in 2024, the Tether stablecoin on Tron’s blockchain had become “a preferred choice for crypto money launderers in East and Southeast Asia.”[10]
Crypto-fueled crime has skyrocketed since President Trump came back into office. In just one year, from 2024 to 2025, illicit finance roughly tripled from $59 billion to $154 billion.[11]Tron has played an outsized role in this dynamic. While Tron accounts for a third of all payment tokens in the crypto ecosystem by some metrics, 58% of all illicit finance in crypto occurred on Tron’s network in 2024.[12]
This is a clear example of how President Trump’s blatant crypto corruption creates back doors for his family’s business partners, creating a pay-to-play enforcement regime that turns a blind eye to grave threats to national security and consumer protection. As part of the Permanent Subcommittee on Investigation’s (“PSI” or “the Subcommittee”) ongoing inquiry into the illicit use of cryptocurrencies, please provide information and records responsive to the following requests by April 13, 2026.
Please contact the Subcommittee should you have any questions about responding to these requests. Thank you for your attention to this matter.
Sincerely,
-30-
[1]Chris Prentice and Marisa Taylor,Exclusive: US SEC’s ex-enforcement chief clashed with bosses over Trump cases before leaving, sources say, Reuters (Mar. 23, 2026) https://www.reuters.com/business/finance/us-secs-ex-enforcement-chief-clashed-with-bosses-before-leaving-sources-say-2026-03-23/; Dawn Kopecki and Chris Prentice,Exclusive: US SEC’s top cop resigns after just six months on the job, Reuters (Mar. 16, 2026) https://www.reuters.
[2]Dawn Kopecki and Chris Prentice,Exclusive: US SEC’s top cop resigns after just six months on the job, Reuters (Mar. 16, 2026) https://www.reuters.com/business/finance/us-sec-enforcement-director-leave-agency-after-months-job-sources-say-2026-03-16/.
[3]Id.; Chris Prentice and Marisa Taylor,Exclusive: US SEC’s ex-enforcement chief clashed with bosses over Trump cases before leaving, sources say, Reuters (Mar. 23, 2026), https://www.reuters.com/business/finance/us-secs-ex-enforcement-chief-clashed-with-bosses-before-leaving-sources-say-2026-03-23/.
[4]Id.
[5]Dave Michaels and Vicky Ge Huang,SEC Dismisses Fraud Case Against Crypto Billionaire Justin Sun, Wall Street Journal (Mar. 5, 2026). https://www.wsj.com/finance/regulation/sec-dismisses-fraud-case-against-crypto-billionaire-justin-sun-2accb716?gaa_at.
[6]Id.
[7]Angus Berwick, Patricia Kowsmann, and Vicky Ge Huang,A Crypto Billionaire Who Feared Arrest in the U.S. Returns for Dinner With Trump, Wall Street Journal (May 22, 2025) https://www.wsj.com/finance/currencies/justin-sun-trump-crypto-dinner-7efd5367?mod.
[8]Id.
[9]Id.
[10]United Nations Office on Drugs and Crime,Casinos, Money Laundering, Underground Banking, and Transnational Organized Crime in East and Southeast Asia: A Hidden and Accelerating Threat(Jan. 2024) https://www.unodc.org/roseap/uploads/documents/Publications/2024/Casino_Underground_Banking_Report_2024.pdf.
[11]Chainalysis,Crypto Crime in 2025 Was Primarily Driven by 694% Surge in State-Driven Sanctions Evasion Volume(Mar. 5, 2026) https://www.chainalysis.com/blog/crypto-sanctions-2026/.
[12]Visa,Stablecoin Supply, https://visaonchainanalytics.com/supply (last accessed Mar. 25, 2026); TRM Labs,2025 Crypto Crime Report(Feb. 10, 2025) https://www.trmlabs.com/reports-and-whitepapers/2025-crypto-crime-report.
[13]For purposes of this request, “records” include any written, recorded, or graphic material of any kind, including letters, memoranda, reports, notes, electronic data (emails, email attachments, and any other electronically-created or stored information), direct messages, chats, calendar entries, inter-office communications, meeting minutes, phone/voice mail or recordings/records of verbal communications, and drafts (whether or not they resulted in final documents).
[14]For purposes of this request, “communications” include any records, as defined above, transmitted in any way between two or more individuals or entities.