Democrats Press SEC on Justin Sun’s $75M Stake in Trump-Backed DeFi Project

The letter, addressed to SEC Chair Paul Atkins and acting director of the division of corporation finance at the SEC, Cicely LaMothe, calls on the Commission to explain whether its enforcement case against Justin Sun was abandoned after his $75 million investment in the Trump-backed World Liberty Financial project. Sun, who founded the blockchain platform Tron, has previously faced civil SEC charges. The timing of his investment and its relationship to regulatory action has prompted concern from lawmakers.

According to the lawmakers, the case is not simply about a single investor or project. It touches on wider issues of financial transparency, investor protection, and the influence of foreign actors in U.S. political and economic affairs. With Trump once again in the White House, the matter carries both regulatory and political significance.

In their letter, Casten and Merkley outlined a series of questions that they want the SEC to address. These include whether any communications took place between the Trump family or administration officials and the SEC regarding enforcement actions against Sun, and whether Sun’s $75 million investment in WLF was a factor in the SEC’s decision to abandon its case against him. They also asked how many complaints about Sun or his affiliated companies have been received, and what steps have been taken to protect investors from potential harm.

The lawmakers stressed that investor protection is a core mandate of the SEC, and that any perception of political interference could erode public trust. They requested written responses by October 2, 2025, emphasizing the urgency of clear and transparent answers.

The letter also highlighted concerns about Justin Sun’s ties to China, warning that such connections raise serious national security questions when large sums are invested in projects associated with U.S. political figures. The lawmakers argued that foreign influence through financial channels, particularly in digital assets, presents risks that regulators must address proactively. They emphasized that the involvement of foreign investors in ventures linked to American political leaders underscores the need for strict oversight, as even the perception of undue influence can erode confidence in both markets and governance.

World Liberty Financial is described as a decentralized finance project backed by President Trump and his family members. Lawmakers warn that without proper oversight, such ventures may expose U.S. investors to significant risk. The fact that a politically connected project has drawn a $75 million investment from Justin Sun, who has an unresolved SEC history, heightens those concerns. Casten and Merkley argue that this situation demands close scrutiny from the SEC to ensure its core mission of protecting investors and maintaining market integrity is upheld.

The SEC’s response to the lawmakers’ letter is likely to influence how its role is perceived. Providing detailed answers could clarify how enforcement decisions are made, while limited disclosure may leave some questions unresolved. For the crypto industry, the development reflects the continuing uncertainty surrounding regulation. As digital assets gain broader visibility, issues of compliance, disclosure, and investor safeguards remain part of ongoing policy discussions in Washington.

This case is part of a broader trend where digital assets and political activity intersect more frequently. In recent years, cryptocurrencies have shifted from niche markets into wider policy discussions, with differing views on their potential benefits and risks. Because the sector is global, it is also subject to scrutiny regarding cross-border investment and influence.

The SEC is expected to respond to the Casten–Merkley letter, and its reply may help clarify the agency’s position. The response could address how enforcement matters are evaluated and outline the steps being taken to ensure transparency in regulatory processes. For the digital asset sector, the exchange highlights the ongoing role of regulators in shaping expectations around governance, compliance, and disclosure. These areas continue to be discussed as the industry develops and as policymakers consider how best to oversee emerging financial technologies.

The Casten–Merkley letter reflects continuing attention in Washington to the relationship between digital assets, political activity, and regulatory oversight. The lawmakers are requesting answers from the SEC to clarify how enforcement decisions are made and communicated. The agency’s response will contribute to ongoing discussions about regulatory processes, investor protection, and the broader framework governing digital assets in the United States.