US lawmakers have launched a formal inquiry into the Securities and Exchange Commission's abrupt suspension of enforcement actions against TRON founder Justin Sun and the subsequent Nasdaq listing of TRON via reverse merger in July 2025. Senator Jeff Merkley and Representative Sean Casten sent a letter dated September 17 to SEC Chair Paul Atkins and acting director Cicely LaMothe, demanding answers about potential conflicts of interest and national security risks.
The lawmakers highlighted Sun's $75 million investment in Trump-linked World Liberty Financial (WLFI) and his support for the TRUMP memecoin, which reportedly generated hundreds of millions for Trump-associated entities. They questioned whether these "substantial investments" influenced the SEC's decision to drop its 2023 lawsuit alleging Sun offered unregistered securities through TRX tokens. The case was stayed in February 2025, shortly after former Chair Gary Gensler's resignation.
Concerns were raised about TRON's reverse merger process, which allowed the company to bypass traditional IPO requirements. Lawmakers cited FinCEN findings that TRON's blockchain has been exploited by criminal groups and ongoing DOJ investigations since 2021. They warned that Sun's complex geopolitical ties and the listing process "raise financial and national security risks" for US markets.
TRON's stock already declined 10% post-IPO amid investor skepticism. Congress has given the SEC until October 2 to respond, with potential for wider hearings on foreign crypto listings. Neither TRON nor Sun has commented on the allegations.
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