Maxine Waters seeks SEC hearing on controversial crypto issues
Crypto journalist
Anas Hasan
Crypto journalist
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Representative Maxine Waters called for the appointment of House Financial Services Committee Chairman French Hill to an oversight hearing with SEC Chairman Paul Atkins, citing the agency's dismissal of major crypto enforcement actions and unprecedented politics by the Trump administration.
Waters sent the detailed letter on Sunday, which outlines her efforts to get Congress to investigate the SEC's dramatic policy shift since Atkins took over.
The rank-and-file Democrat said the committee has not held any hearings with Atkins despite the committee's “rapid, significant and questionable policy changes,” comparing it to two times during former chairman Gary Gensler's first year.
Crypto enforcement retreat draws fire
The lawmaker's central concern is the SEC's suspension of enforcement actions against Coinbase, Binance and Justin Sun, among others previously accused of security breaches.
“The SEC has dropped or stayed major enforcement actions against several crypto companies and their fiduciary charges of violating our securities laws,” Woods wrote, adding that defendants sometimes dismissed the charges before the commission voted.
“Has Chairman Atkins' office taken an unusually active role in negotiating these issues?” he asked.
The agency has cut or suspended nearly sixty percent of crypto cases since Trump's January inauguration, and according to recent reports, no new crypto enforcement actions will be filed in 2025.
The SEC dismissed cases against Coinbase in February 2025 and against Kraken in March, both of which were resolved without penalty or admission of wrongdoing.
The Binance case ended in May following a request for a freeze in February, while the Ripple case ended in August with a reduced $125 million fine, but appeals were dismissed.
Waters has criticized Trump's dealings in crypto, citing his earlier October pardon of Binance founder Changpeng Zhao as legalizing “cryptocrime” and enabling operations with “virtually no protection.”
Freedom and transparency concerns mount
Beyond crypto enforcement, Waters listed ten areas that require immediate oversight, starting with SEC independence.
“Congress designed the SEC to be independent of the White House, but Chairman Atkins has repeatedly shaped the agency's agenda as a tool of the administration,” she warned, adding that “politicization threatens market integrity” amid dubious business practices surrounding tariff announcements.
The panel criticized the SEC's policy-making approach, which it says “evades the notice and comment rule that favors employee disclosures” and violates the Administrative Procedure Act.
Waters highlighted alienated investor protection rules covering artificial intelligence, cybersecurity and market structure reforms, stemming from GameStop-era concerns, and asked for “a substantive analysis on what basis the SEC would have to reverse course.”
Meanwhile, the SEC delayed hedge fund transparency requirements and securities lending reporting periods through 2028, a move Waters said would effectively kill fraud-detection reforms.
The agency has announced that it will no longer issue no-action responses to shareholder exclusions following Atkins' guidelines.
A screening agenda is being reviewed.
Waters echoed concerns raised by SEC Commissioner Caroline Crenshaw, comparing Atkins's regulatory oversight to conditions prior to the stock market crash of 1929.
The agency's spring 2025 agenda outlines reducing recordkeeping requirements and disclosure obligations, as well as expanding access to personal assets for retirement accounts.
“We haven't had an opportunity to investigate Chairman Atkins' regulatory agenda,” Waters said.
The letter also addressed the SEC's decision to waive climate risk disclosure rules despite investors' demands for standardized information, as well as concerns about weakening market surveillance through a “notice-first enforcement approach.”
Waters also called for plans to restructure a stronger audit trail, which is necessary to detect insider trading.
Staffing emerged as another flashpoint, with Reuters data showing the SEC lost between fifteen and nineteen percent of its full-time employees in the Enforcement, Trading and Markets and Corporate Finance divisions over several weeks in May.
“We need to assess the effects of the recent exodus of senior staff,” Watts wrote, questioning whether the agency maintains “the human capital necessary to carry out its mission.”
“Investors, retirees and working families deserve transparency and accountability” from the nation's top securities regulators, Watershill said, urging a hearing “as soon as possible when Congress returns.”
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