U.S. Securities and Exchange Commission Chair Paul Atkins fielded questions from lawmakers about President Donald Trump-linked memecoin and whether connections to crypto entrepreneur Justin Sun could pose a problem.
Atkins, less than a month in the role, was asked on Tuesday during a House Appropriations Committee, which oversees federal agency funding. Lawmakers asked about his approach to crypto regulation, the SEC’s paused fraud case against Sun, and recent activity involving Trump-linked digital assets.
Rep. Glenn Ivey, D-Md., pointed to events in the lead-up to Trump’s January inauguration, noting that Sun’s company Tron purchased $30 million worth of tokens from World Liberty Financial — a decentralized finance firm that says it is inspired by the president.
Later, the SEC moved to stay its fraud case against Sun and his companies, including Tron, effectively putting it on pause. Meanwhile, Trump has his own memecoin circulating and will host a gala later this week for the top 220 memecoin holders. Sun said he is one of those holders in a post on X early on Tuesday.
“Honored to support @POTUS and grateful for the invitation from @GetTrumpMemes to attend President Trump’s Gala Dinner as his TOP fan!” Sun posted.
“This, frankly to me, smells very bad,” Ivey said. “My hope would be that the SEC would be investigating that piece.”
Atkins said Sun’s case was an “active case,” and noted that the SEC has said that memecoins are not securities.
Trump-appointed Atkins has said that the SEC is embarking on a “new day” at the agency following a less-than-friendly approach under former chair Gary Gensler toward the crypto industry. Under Gensler, the agency took a more wary approach to crypto and brought several charges against big names in the industry. Many of those cases were later dropped.
On Tuesday, Atkins said in prepared testimony that he planned to approach crypto regulation through notice and comment rulemaking rather than regulating via enforcement.
“A key priority of my Chairmanship will be to develop a rational regulatory framework for crypto asset markets that establishes clear rules of the road for the issuance, custody, and trading of crypto assets while continuing to discourage bad actors from violating the law,” Atkins said.
Crypto task force funding
Rep. Chuck Edwards, R-N.C., asked Atkins whether the SEC’s new crypto task force would require additional funding. The task force, formed earlier this year by former acting chair Mark Uyeda, is led by Commissioner Hester Peirce and aims to hold industry roundtables and clarify how securities laws apply to crypto.
“I’m not sure exactly,” Atkins said. “It’s staffed by current employees and Commissioner Peirce is leading it so it’s not taking any additional funding.”
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