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SEC Head Defends Enforcement Changes Amid Justin Sun Case Questions

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SEC Head Defends Enforcement Changes Amid Justin Sun Case Questions


SEC Chair Paul Atkins has defended the agency’s enforcement shift as lawmakers question why Justin Sun’s case was paused.

U.S. Securities and Exchange Commission (SEC) Chair Paul Atkins is facing scrutiny from lawmakers as the agency moves to reshape its cryptocurrency regulatory framework.

Democrats are questioning potential links between industry actors and President Donald Trump amid a broader decline in enforcement actions.

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SEC Scrutinized Over Tron Case

During a House Financial Services Committee hearing, Democratic members zeroed in on the SEC’s decision to pause its case against Tron founder Justin Sun. Representative Maxine Waters pointed to what she described as a sweeping rollback of prior crypto enforcement actions after Trump entered the White House and new SEC leadership took over last year.

Waters referenced the regulator’s 2023 lawsuit against Sun, in which he was accused of organizing the unregistered sale of crypto securities tied to the TRX and BTT tokens and manipulating trading volumes.

Later in February 2025, the SEC asked the federal court overseeing the case to issue a stay, which paused the proceedings. Since that decision, Sun has become a major financial supporter of Trump-linked crypto ventures, purchasing billions of WLFI tokens, making him the largest backer of World Liberty Financial.

Waters also highlighted a more recent claim by his alleged former girlfriend, who publicly suggested she possesses evidence of TRX manipulation.

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Atkins declined to address specifics of the case, telling lawmakers he could not comment on individual enforcement matters. He added that he would be open to further discussion in a confidential setting “to the extent the rules allow me to do that.”

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When asked whether the agency ever acts to protect investors in ways that could negatively affect Trump-affiliated businesses, he responded, “As far as what the Trump family does or not, I can’t speak to that.”

Trump’s Ties to Binance

Lawmakers also raised concerns about other high-profile litigation the SEC dropped last year, including cases against Binance, Ripple, Coinbase, Kraken, and Robinhood.

In May 2025, the financial watchdog ended its lawsuit against Binance, which it had sued in 2023 for offering unlicensed services and misrepresenting trading controls. Trump later also pardoned Zhao, while a stablecoin issued by WLF was used by an Abu Dhabi investment firm for a $2 billion investment in Binance.

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“Explain to me how this happens without any enforcement action,” Representative Stephen Lynch said. “The reputational damage that the SEC is suffering right now is unbelievable. And you’re in the seat, sir. It’s your responsibility. I’m just asking for an explanation.”

The SEC Chair defended the regulator, saying it has a “robust enforcement effort” and continues to bring cases. However, data from Cornerstone Research shows that its overall legal actions fell 30% in 2025, while crypto-related cases dropped 60%.

Atkins, who became the organization’s chair in April 2025 after Gary Gensler’s departure, is known for criticizing the previous aggressive approach and framing his leadership as a move away from litigation-heavy tactics.

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Pudgy Penguins Hit WIth Trademark Suit Over Merch

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Pudgy Penguins Hit WIth Trademark Suit Over Merch

PEI Licensing, the firm behind the clothing brand Original Penguin, has filed a lawsuit against the nonfungible token project Pudgy Penguins, alleging trademark infringement, dilution and unfair competition.

The lawsuit, filed in a Florida federal court on Wednesday, focused on claims around Pudgy Penguins’ apparel, accusing the company of using a “family of penguin trademarks that are confusingly similar” to its own.

“This action results from Defendant’s unauthorized use and attempted registration of various PENGUIN word and design trademarks in connection with apparel and related goods and services that are confusingly similar to PEI’s federally registered and famous PENGUIN and penguin design trademarks,” PEI said in its complaint.

An excerpt of PEI’s complaint comparing its Original Penguin brand to Pudgy Penguins’ merchandise. Source: CourtListener

PEI claimed in its lawsuit that it has used the “PENGUIN word mark at least as early as 1967” and first used a “penguin design” on apparel as early as 1956.

PEI Licensing said that it sent a cease and desist to Pudgy Penguins in October 2023, claiming its “products infringe and dilute PEI’s famous PENGUIN Marks.”

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The letter also demanded that Pudgy Penguins abandon applications with the US Patent and Trademark Office “to register various PENGUIN marks,” according to the lawsuit.

PEI claimed that Pudgy Penguins had “misappropriated valuable property rights of PEI,” which was “likely to cause confusion or mistake, or to deceive members of the consuming public.”

PEI asked the court to order the USPTO to reject Pudgy Penguins’ applications and stop the company from allegedly infringing on its trademark. 

Related: SEC ends case against Justin Sun with $10M settlement

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It also requested that Pudgy Penguins be ordered to destroy any products found “likely to be confused” with PEI’s trademarks and be awarded all profits from the sales of such products.

Pudgy Penguins’ legal chief, Jennifer McGlone, told Cointelegraph the company “was surprised by the action, particularly as both parties had been engaged in productive discussions to resolve this matter privately.”

McGlone said the company had advanced applications with the USPTO and was “confident that PEI’s claims lack merit. The trademarks in question are visually distinct and serve entirely different audiences and markets.”

“We have the utmost confidence that we will prevail as Pudgy Penguins has already secured multiple trademark application approvals from the USPTO covering the Pudgy Penguins brand and related marks,” she said.

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Meanwhile, the Pudgy Penguins X account posted a meme implying that its brand bears no similarities with Original Penguin.

Source: Pudgy Penguins

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