Waters Demands SEC Oversight Amid Crypto Enforcement Collapse

The core of Representative Waters’ concern is a stark statistical reversal at the SEC. Her letter notes that since January 2025, around 60% of the agency’s cryptocurrency enforcement actions have been either dismissed or suspended. This shift represents a dramatic departure from the posture under former Chairman Gary Gensler, whose tenure saw dozens of annual enforcement filings. Most strikingly, the SEC has initiated zero new crypto enforcement actions throughout 2025. This regulatory pullback is not merely theoretical; it has resulted in notably lenient outcomes for major industry players. Cases against Coinbase and Kraken concluded without financial penalties, while the high-profile Ripple case saw its penalty slashed to $125 million before appeals were withdrawn entirely.

Waters specifically highlighted terminated proceedings against crypto giants Coinbase and Binance, as well as actions involving entrepreneur Justin Sun. She emphasized that these were not minor technicalities but matters involving “credible allegations of securities law violations” that were abandoned without a public explanation from the agency. This lack of transparency, coupled with the sheer scale of the dismissals, forms the basis of her call for congressional scrutiny into whether the SEC’s institutional independence has been compromised.

Beyond the statistics, Waters’ letter points to troubling procedural anomalies that suggest potential political interference. She documented instances where defendant companies, including Coinbase and Binance, publicly announced the termination of SEC enforcement actions before the Commission had formally voted on those decisions. In standard regulatory procedure, Commission votes precede any public announcement, making these timing discrepancies highly unusual.

This sequence of events led Waters to explicitly question whether Chairman Paul Atkins’ office became “unusually active” in orchestrating settlements. This diplomatic language implies a concern over direct, personal involvement in case resolutions that may have bypassed normal channels. The appointment of Atkins in April 2025, following former President Trump’s nomination, aligns with the beginning of this enforcement collapse. Under his leadership, the agency has launched initiatives like Project Crypto, streamlined ETF approvals, and systematically wound down pending investigations, cementing a markedly friendlier regulatory stance.

Waters’ concerns extend beyond cryptocurrency to encompass broader market integrity. Her letter outlines ten specific areas requiring congressional scrutiny, including the potential politicization of enforcement, weakened market surveillance, and reduced investor protections. She drew a stark historical parallel, citing warnings from SEC Commissioner Caroline Crenshaw about current conditions resembling the inadequate oversight that preceded the 1929 crash.

The Spring 2025 regulatory agenda further alarmed Waters, as it proposes reducing securities offering registration requirements, loosening disclosure obligations, and expanding retirement account access to private markets—changes she views as collectively reducing oversight. She also referenced suspicious trading patterns ahead of major policy announcements, such as Trump’s tariff suspension, suggesting possible insider trading based on advance government knowledge.

Ultimately, Waters frames the lack of oversight as an abdication of congressional responsibility. She noted that former Chairman Gensler testified twice before Congress in his first year, establishing a precedent for accountability. In contrast, despite the seismic policy shifts under Chairman Atkins, the House Financial Services Committee has not held a single oversight hearing with him. Waters’ demand for a hearing is a direct challenge to this silence, seeking to reassert congressional authority over a regulator she believes is rapidly retreating from its core mission.