U.S. Federal Democratic Senator Jeff Merkley and Congressman Sean Casten jointly sent a letter to the U.S. Securities and Exchange Commission (SEC) on 9/17, requesting a complete investigation and response regarding the business dealings of Tron founder Justin Sun with the Trump family, the shell listing plan, and the background of Chinese capital. The letter pointed out that the SEC's withdrawal of the fraud lawsuit against Justin Sun in February this year raises concerns about political cash flow, national security, and investor protection.
The U.S. has conducted repeated investigations, and Justin Sun dares not enter the country.
The letter pointed out that as early as 2021, the U.S. Department of Justice (DOJ) had reported that an investigation into Justin Sun for financial crimes had begun. By March 2023, the SEC formally charged Justin Sun on the grounds of 'suspected manipulation of his own platform's coin TRX price and illegal arbitrage of 31 million dollars.'
The US Department of the Treasury's Financial Crimes Enforcement Network (FinCEN) reported that an increasing number of criminals are using the Tron platform as a medium for money laundering and other illegal activities, leading Sun Yuchen to avoid entering the US for years, fearing investigation or prosecution for financial crimes if he steps foot in the country.
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Trump's re-election, political capital flows, and the SEC's dismissal of the case
After Trump's re-election in November 2024, Sun Yuchen invested 75 million USD in Trump coin (TRUMP) and the Trump family's crypto project (World Liberty Financial, WLF), bringing about 400 million USD in profits to the Trump family.
In February 2025, the SEC and Sun Yuchen's lawyer jointly requested the court to dismiss the case, which was swiftly approved. The two lawmakers demanded the SEC explain whether there had been private communications with the White House or the Trump family before the case was dismissed. Subsequently, in May, Sun Yuchen appeared at a private golf club in Washington D.C. where Trump hosted a Trump coin banquet, further highlighting the sensitivity of conflicts of interest and political capital flows.
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Concerns about fraud in reverse mergers, demanding the SEC conduct a thorough investigation
In June 2025, Sun Yuchen acquired the US-listed company SRM Entertainment for 210 million USD, allowing Tron to enter the US capital market through a reverse merger and renaming the company to Tron Inc.
The letter pointed out that this acquisition and the fundraising and investor connections related to the reverse merger were all led by the investment bank Dominari Securities located in Trump Tower, with Trump's eldest son Donald Trump Jr. and second son Eric Trump both listed as advisors to the company.
The two lawmakers reminded that reverse mergers are often used to evade stringent IPO scrutiny and have allowed several Chinese companies to defraud up to 34 billion USD between 2007 and 2010. Therefore, they requested that the SEC clarify whether SRM disclosed financial reports as required, announced significant transactions within 4 days, and whether it continued to use the same auditing firm, among other details.
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WLFI allows the Trump family to make huge profits, and the SEC calls for regulation under securities law
On September 1, 2025, the WLF platform coin WLFI was listed on exchanges such as Coinbase and Kraken, instantly increasing the Trump family's net worth by about 5 billion USD.
The two lawmakers emphasized that if Sun Yuchen were to sell off all his WLFI at once, the coin price could plummet, causing retail investors to lose everything. More importantly, such tokens should be regulated under US securities law, but WLFI has not completed the SEC registration process; if issues arise, investors may not be able to recover their funds.
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Sun Yuchen involved in national security risks, Tron could be delisted in the US
The letter also added that Sun Yuchen was once a member of the Chinese People's Political Consultative Conference and claimed to have contacts with senior Chinese government officials. Investigations have indicated that 17 out of the top 20 wallets of Tron are suspected to be related to criminal organizations within China. The SEC has also received complaints regarding Sun Yuchen and Tron related to money laundering and market manipulation, requiring a detailed account of the handling situation.
The two lawmakers ultimately requested that the SEC respond in full by 10/2, confirming whether Tron should be added to the list of banned listings to prevent further fraud and illegal activities. They also examined whether Sun Yuchen is a politically exposed person (PEP) and the associated risks with the Chinese Communist Party.
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This article reports that US lawmakers require the SEC to explain the case of Sun Yuchen, triggering concerns about Trump WLF capital flows, reverse mergers, and Chinese capital. It first appeared in Chain News ABMedia.
