House Democrats Torch SEC Over Dropped Crypto Cases—Ripple Lawsuit Drama Reignites
Washington just threw gasoline on the crypto regulation fire. House Democrats are publicly eviscerating the SEC for quietly shelving enforcement cases—and everyone's whispering about the Ripple lawsuit again.
The Blowback
It’s a political broadside. Lawmakers accuse the regulator of inconsistency—aggressively pursuing some firms while letting others off the hook. The message is clear: the SEC’s enforcement strategy looks arbitrary, maybe even political.
Ripple’s Shadow Looms Large
Every critique of the SEC’s current approach circles back to its landmark case against Ripple. The lawsuit’s twists and turns have become the benchmark for regulatory overreach—or necessary enforcement, depending on who you ask. Now, with cases being dropped, critics ask: was Ripple uniquely targeted?
A Market Watching Closely
The fallout isn’t confined to Capitol Hill. The crypto market treats regulatory uncertainty like a volatile asset—it hates it. Every dropped case, every congressional hearing, fuels speculation about which coin is next on the SEC’s list or, conversely, which one might get a surprise pass. It’s policymaking as a high-stakes guessing game for traders—just another day in the speculative casino of modern finance.
The SEC faces a brutal choice: double down on enforcement and face more political heat, or pull back and risk looking like it’s lost its grip. Either way, crypto’s legal wars are far from over—they’re just getting more political.
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
