The U.S. Securities and Exchange Commission has taken a step toward partially settling its long-running enforcement action against crypto entrepreneur Justin Sun and several affiliated entities, according to a proposed final judgment submitted Wednesday in federal court in New York City.
Under the settlement terms, Rainberry Inc., the firm behind the BitTorrent protocol, will pay a $10 million civil penalty and agree to refrain from any future violations of securities laws.
In return, the U.S. Securities and Exchange Commission will drop its remaining claims against Justin Sun and associated entities, including the Tron Foundation and the BitTorrent Foundation. The case will be dismissed with prejudice, preventing the regulator from pursuing the same claims in the future.
“The Commission has reviewed and approved the terms of the settlement, as reflected in the Consent and proposed Final Judgment. Rainberry, Justin Sun, Tron Foundation, and BitTorrent Foundation have consented to entry of the Final Judgment,” the filing reads.
In 2023, the SEC accused Justin Sun and three of his affiliated companies of conducting unregistered securities offerings involving the TRON (TRX) and BitTorrent (BTT) tokens. The agency also alleged that Sun engaged in fraudulent market manipulation by carrying out wash trades to influence TRX’s price and by paying celebrities, including singer Akon, actress Lindsay Lohan, and YouTuber Jake Paul, to promote the tokens without properly disclosing their compensation.
According to Thursday’s court filing, Justin Sun and his companies agreed to the terms set by the SEC without admitting or denying the allegations.
It marks the latest crypto-related lawsuit the SEC has stepped back from during the administration of President Donald Trump. The regulator has also dropped or settled similar cases originally brought under former SEC Chair Gary Gensler against companies such as Binance, Ripple, and Coinbase, among others.
Justin Sun’s Trump Ties Draw Sharp Scrutiny From Lawmakers
In November 2024, the same month Donald Trump won the presidency, Justin Sun became the largest investor in the Trump family’s crypto venture, World Liberty Financial, purchasing $30 million worth of its tokens.
Sun later increased his investment to $75 million in January of last year, and by the following month, both the SEC and Sun requested the court to pause the case to facilitate settlement discussions.
The settlement follows warnings from three House Democrats last month, who cautioned that leaving the U.S. Securities and Exchange Commission’s case against Justin Sun unresolved could “undermine investors’ confidence” in the regulator.
Representatives Maxine Waters, Brad Sherman, and Sean Casten urged SEC Chairman Paul Atkins to reconsider reopening the case against Sun, expressing concern over a potential “pay-to-play scheme” linked to Sun’s purchases of World Liberty Financial tokens.
Shortly after the SEC ended its long-running fraud and securities violation lawsuit, Sun stated in a post on X, “Today’s resolution brings closure, but I never stopped building. I will continue to focus on accelerating innovation in the United States and around the world and look forward to working with the SEC to develop guidance and regulations for crypto going forward.”
Source: https://zycrypto.com/crypto-mogul-justin-sun-agrees-to-10m-settlement-with-sec-in-long-running-tron-case/
