House Democrats Blast SEC Over Dropped Crypto Cases, Ripple Lawsuit Talk Resurfaces

House Democrats have accused the SEC of abandoning many high-profile investigations, including its legal battle with Ripple, which has brought attention back to the agency’s handling of crypto enforcement. 

The claims, which were outlined in a January 15 letter to SEC Chair Paul Atkins, raised questions about why several cases were dropped after favorable court rulings and whether political relationships played any role in those decisions. However, according to crypto attorney Bill Morgan, these cases are wrapped up, done, and dusted.

Lawmakers Say SEC Walked Away From Major Crypto Cases

In a January 15, 2026 letter addressed to Atkins, House Democrats accused the agency of dramatically scaling back crypto enforcement since early 2025. The lawmakers claimed the SEC has dismissed or closed more than a dozen major crypto-related cases, including actions against Binance, Coinbase, Kraken, and Ripple, despite having received favorable court rulings in some of those matters. 

According to the letter, companies whose cases or investigations were dismissed donated at least $1 million each to Trump’s inauguration. This raises concerns about an unmistakable inference of a pay-to-play scheme, investor protection and market integrity at a time when digital assets are starting to become deeply intertwined with capital markets.

Much of the letter’s criticism was focused on the SEC’s decision to seek and maintain a stay in its case against Justin Sun, which has now been in place for about 11 months now. Unlike all the other cases, the SEC’s case against Justin Sun has not yet been dismissed. Democratic Lawmakers claimed this move sends a dangerous signal that political connections may influence enforcement outcomes. 

The letter explicitly referenced Sun’s reported financial ties to businesses linked to Donald Trump. One of which was Sun’s reveal in September 2025 that he was purchasing an additional $10 million worth of $WLFI tokens from World Liberty Financial (WLFI), a Trump family business. 

According to the democrats, such circumstances could undermine public trust in the SEC’s independence. The Letter also seeks information related to the SEC’s knowledge of Sun’s ties to the People’s Republic of China and any CCP-affiliated persons or entities.

Crypto Lawyer Pushes Back On Ripple Lawsuit Talk

The letter by House Democrats brings into focus whether political pressure could lead to a new action against Ripple and other firms. However, according to Morgan, this is not possible.

Morgan dismissed the idea that the SEC could simply relaunch cases it has already litigated or closed on the same grounds, pointing to the legal doctrine of res judicata. Under that principle, once a matter has been conclusively decided between the same parties, it cannot be retried on identical issues.

“Too bad the SEC can’t go against those companies again on the same matters. Res Judicata baby. Live with it fools,” he said.

Still, one unresolved question hangs over the broader controversy. Unlike the other crypto cases cited in the lawmakers’ letter, the SEC’s action against Justin Sun has not been formally dismissed and can be revisited anytime.

Featured image from Getty Images, chart from TradingView