Sen. Warren presses SEC nominee Paul Atkins on FTX ties, Trump’s crypto conflicts

Sen. Elizabeth Warren raised concerns over potential incoming Securities and Exchange Commission Chair Paul Atkins' ties to collapsed crypto exchange FTX and President Donald Trump's possible conflicts of interests with the rise of his memecoin.

The Massachusetts Democrat, well-known for disapproving much of the crypto industry, sent a 34-page letter to Atkins ahead of his nomination hearing on Thursday. Trump tapped Atkins, who has shown support for the crypto industry, to lead the SEC under his administration. The letter also touched on other SEC-related topics, including the climate risk disclosure rule. 

Atkins will appear  before the Senate Banking Committee on Thursday. According to its website, Atkins founded the consulting firm Patomak Global Partners in 2009 and has clients including banks, crypto exchanges, and DeFi platforms. He also joined The Digital Chamber's board of advisers in 2020.

According to multiple news reports, including The Wall Street Journal , FTX was a client of Patomak Global Partners and signed on as an adviser to FTX in early 2022.  

"Your deep involvement with FTX and other high-paying crypto clients raises questions about your approach to crypto regulation—and concerns about the extent of your knowledge of FTX’s illegal activities," Warren said. 

FTX filed for bankruptcy in late 2022. The exchange's CEO, Sam Bankman-Fried, was found guilty in November 2023 of seven criminal counts, including two counts each of wire fraud and conspiracy to commit wire fraud, and was sentenced to nearly 25 years in prison.

Warren questioned Atkins about advising Bankman-Fried and asked if customers would have been protected if FTX had complied with U.S. securities broker-dealer rules.

Patomak Global Partners did not respond to a request for comment. 

$TRUMP 

Warren also questioned overall Trump's ties to crypto, including through the launch of his memecoin and the SEC's decision to ask the court to pause its lawsuit against crypto entrepreneur Justin Sun. 

The SEC charged Sun and three of his companies — Tron Foundation Limited, BitTorrent Foundation Ltd., and Rainberry Inc — in March 2023 over allegedly offering and selling Tronix and BitTorrent as investments “through multiple unregistered ‘bounty programs.’”

Over a year later, in November, Sun was named an advisor to World Liberty Financial, a decentralized finance initiative backed by Donald Trump and his family. One of Sun's companies, Tron, bought $30 million worth of World Liberty Financial's tokens. 

"Have you had any conversations with President Trump, any member of his family, or any representative of the President about Mr. Sun or his companies, since the President named you as his nominee?" Warren asked. 

Warren also pressed President Trump's memecoin, $TRUMP, which was launched days before his inauguration in January. A month later, the SEC released a statement that said memecoins were not securities. 

"The Staff Statement appears to have the effect of entirely exempting President Trump’s meme coin from the SEC’s scrutiny," Warren said while asking Atkins to disclose whether he had discussions with Trump about a potential $TRUMP ETF. 

Atkins would be joining the SEC during a time of major transition at the agency. Former SEC Chair Gary Gensler had taken a weary approach to regulating digital assets and had said most cryptocurrencies would be securities while bringing multiple lawsuits against crypto firms for failing to register with the agency. Since Gensler's exit in January, the SEC has rescinded controversial crypto accounting guidance, dropped enforcement actions against major crypto industry players and created a crypto task force. 

Atkin's nomination hearing is at 10 a.m. ET, along with those of other nominees, including Trump's pick for Comptroller of the Currency, Jonathan Gould.