SEC Chair Atkins admits that Justin Sun has an 'active case' ahead of Trump's memecoins dinner.
Paul Atkins, the new SEC Chair, has been in his position for less than a month, but is already under pressure.
On Tuesday, during a House Appropriations Committee hearing, which oversees funding for federal agencies, lawmakers asked about his approach to cryptocurrency regulation, the SEC's stalled legal proceedings with Sun, and the recent activity related to digital assets linked to Trump.
They wanted to know especially if the connections with cryptocurrency entrepreneur Justin Sun could pose a problem.
Lawmakers question Justin Sun's relationship with the president.
Representative Glenn Ivey, D-Md., highlighted events that occurred before Trump's inauguration in January, noting that Sun's company, Tron, bought tokens worth $30 million from World Liberty Financial (WLFI).
After that, the SEC moved to suspend its fraud case against Sun and his companies, including Tron. Now, Trump will host a gala later this week for the top 220 of his memecoin, and Sun happens to be one of them.
The cryptocurrency mogul revealed that he is one of those who will meet with Trump in an early Tuesday post on X.
'Honored to support @POTUS and grateful for the invitation from @GetTrumpMemes to attend President Trump's Gala Dinner as his NUMBER ONE FAN!' wrote Sun.
Ivey doesn't like it. 'This, frankly, smells very bad to me,' he said on Tuesday. 'My hope would be that the SEC is investigating that piece.'
Atkins was forced to admit that Sun has an 'active case,' but also noted that the SEC does not classify memecoins as securities. The newly appointed Atkins has promised to do things differently after a less friendly approach under former Chair Gary Gensler towards the cryptocurrency industry.
Gensler ruled with an iron fist, forcing the agency to take a more cautious approach towards cryptocurrencies while waging a legal war against big names in the industry. Many of those cases have been dismissed.
The upcoming Trump memecoins dinner has generated significant negative backlash.
President Trump has taken an unorthodox approach since returning to office, so not many know how to react.
A good example is the fact that he launched a meme just before his inauguration and is now planning to sit down for dinner with the top token holders. It is a big deal, considering the bridge it opens between one of the most powerful men in the world and millionaires with various motives.
The dinner, which is being sponsored by the official token backers, has drawn bipartisan criticism in Washington, with lawmakers expressing concerns that the organizers have effectively auctioned off access to Trump. They are also worried that attendees like the excited Justin Sun may be looking to use the avenue to win the president's favor.
Aside from the dinner, Trump is also expected to appear at a private reception for the top 25 holders, a group that will also include Sun.
It was widely speculated that Sun was the top holder of memecoins $TRUMP for weeks, but he did not confirm his participation in the token until Monday. By revealing his involvement, it is believed that he is doubling down on his conviction in the flourishing crypto empire of the Trump family.
Despite the negative reaction, the dinner will take place, and the White House has repeatedly rejected any concerns about conflicts of interest surrounding the event.
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