Congress Questions SEC on Tron IPO and Justin Sun
US lawmakers are seeking answers from the U.S. Securities and Exchange Commission (SEC) regarding enforcement actions tied to Tron and its CEO, Justin Sun. This scrutiny could influence how crypto companies go public on American exchanges.
Senator Jeff Merkley and Representative Sean Casten sent a letter on Wednesday to SEC Chair Paul Atkins and Acting Director Cicely LaMothe. The lawmakers questioned the SEC’s decision to pause an enforcement case against Sun and highlighted concerns about the timing of the move.
Previously, the SEC had sued Sun in 2023 for allegedly offering unregistered securities, but the case was put on hold shortly after former Chair Gary Gensler left the SEC.
Trump-Linked Crypto Investments Under Review
The lawmakers highlighted Sun’s financial involvement in crypto projects associated with former President Donald Trump and his family. These projects include World Liberty Financial (WLFI) and the meme coin Official Trump (TRUMP). Concerns were raised that these links may have influenced the SEC’s decision to halt enforcement.
Due to Sun’s involvement in these high-profile crypto schemes and his attempt to take Tron public via a reverse merger, the SEC has been asked to ensure Tron Inc. complies with U.S. listing requirements.
Also Read : SEC Chair Paul Atkins Indicates a New Age for Crypto Regulations
Scrutiny of Tron’s Nasdaq IPO
Lawmakers also expressed apprehension about Tron’s reverse merger IPO on Nasdaq in July. They cited potential financial and national security risks, including alleged connections to the Chinese government. The SEC was urged to review whether the settlement with Sun adequately protects American investors.
While the investigation is currently focused on Tron and Sun, it could expand to include other foreign crypto firms seeking to go public in the U.S. through similar reverse merger mechanisms.
Implications for Crypto Market Regulations
Under SEC Chair Paul Atkins, several policy changes have been implemented, including pausing or dropping investigations into crypto firms. However, Congress may introduce new rules that could reshape the regulatory landscape.
In July, the Republican-majority House passed the CLARITY Act to create a structured crypto market framework. Senate Banking Committee leaders are expected to expand upon this framework, aiming for legislation to be enacted by 2026.
Proposed bills are likely to include:
- Updated regulations tailored to digital assets
- Clearer roles for regulators like the SEC and CFTC
- Guidelines affecting how companies like Tron can access U.S. capital markets
These measures could have long-term implications for crypto firms seeking public listings in the United States.
