U.S. lawmakers demand SEC to explain the Sun Yuchen case, triggering concerns over Trump WLF's capital flow, backdoor listing, and Chinese investment.

U.S. Federal Democratic Senator Jeff Merkley and Congressman Sean Casten jointly wrote a letter to the U.S. Securities and Exchange Commission (SEC) on 9/17, requesting a complete investigation and response regarding the business dealings of TRON (Justin Sun) with the Trump family, reverse merger plans, and Chinese state-owned background. The letter pointed out that the SEC's withdrawal of the fraud lawsuit against Justin Sun in February this year raises concerns about political funding, national security, and investor protection.

After a series of investigations in the United States, Sun Yuchen dares not to enter the country.

The letter pointed out that as early as 2021, the U.S. Department of Justice (DOJ) had begun a financial crime investigation against Justin Sun. By March 2023, the SEC officially sued Justin Sun on the grounds of “allegedly manipulating the price of its own platform token TRX and illegally arbitraging 31 million dollars.”

The Financial Crimes Enforcement Network of the U.S. Treasury (FinCEN) reported in the same year that an increasing number of criminals are using the TRON platform as a medium for illegal activities such as money laundering, which has caused Sun Yuchen to avoid entering the United States for years, fearing that once he enters, he will be investigated or arrested on charges of financial crime.

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Trump's re-election, political financial flow, and SEC withdrawal of the case

After Trump is re-elected in November 2024, Sun Yuchen invested $75 million in Trump Coin (TRUMP) and the Trump family crypto project (World Liberty Financial, WLF), bringing approximately $400 million in revenue to the Trump family.

In February 2025, the SEC and attorney Sun Yuchen jointly requested the court to dismiss the case, which was quickly granted. Two lawmakers demanded that the SEC explain whether it had communicated privately with the White House or the Trump family before the dismissal. Shortly after, in May, Sun Yuchen appeared at the Trump Coin dinner held at Trump's private golf club in Washington, further highlighting the sensitivity of conflicts of interest and political funding.

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Concerns of fraud arise from reverse mergers, calling for a thorough investigation by the SEC.

In June 2025, Sun Yuchen acquired the US-listed company SRM Entertainment for $210 million, allowing Tron to enter the US capital market through a reverse merger, and renamed the company to Tron Inc.

The letter points out that this acquisition is led by the investment bank Dominari Securities, located in Trump Tower, which is responsible for the fundraising and connecting investors for the reverse merger, with Trump's eldest son Donald Trump Jr. and second son Eric Trump listed as advisors of the company.

Two lawmakers reminded that reverse mergers are often used to evade the strict scrutiny of IPOs, and have allowed multiple Chinese firms to defraud up to $34 billion between 2007 and 2010. Therefore, they require the SEC to clarify whether SRM has disclosed financial reports as required, announced significant transactions within four days, and whether it continues to use the same auditing firm, among other details.

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WLFI allows the Trump family to make a huge profit, SEC calls for regulation under securities laws.

On September 1, 2025, the WLF platform token WLFI was listed on exchanges such as Coinbase and Kraken, increasing the Trump family's net worth by approximately 5 billion dollars.

Two lawmakers emphasized that if Sun Yuchen were to dump all of his WLFI at once, the price of the token could plummet, resulting in retail investors losing all their investments. More importantly, such tokens should be regulated under U.S. securities laws, but WLFI has not completed the SEC registration process. If issues arise, investors may not be able to recover their funds.

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Sun Yuchen涉及國安風險，TRON恐在美下市

The letter also adds that Sun Yuchen was once a member of the Chinese People's Political Consultative Conference and claims to have connections with high-level Chinese government officials. Investigations have pointed out that among the top 20 wallets of Tron, 17 are suspected to be linked to criminal organizations within China. The SEC has also received complaints regarding money laundering and market manipulation related to Sun Yuchen and Tron, which require detailed explanations of the handling situation.

The two lawmakers finally requested that the SEC provide a complete response by 10/2 and confirm whether Tron will be included in the ban list to avoid further fraud and illegal activities. At the same time, they examined whether Sun Yuchen is a politically sensitive person (PEP) and the associated risks with the Chinese Communist Party.

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This article discusses U.S. lawmakers requesting the SEC to explain the Sun Yuchen case, triggering concerns over Trump WLF cash flow, reverse mergers, and Chinese capital. It first appeared on Chain News ABMedia.