SEC Seeks Settlement With Justin Sun in TRON Case

The U.S. Securities and Exchange Commission (SEC) has taken a step toward partially resolving its long-standing enforcement action against crypto entrepreneur Justin Sun and several associated companies. The development was revealed in a proposed final judgment submitted Wednesday to a federal court in New York.

The filing signals potential progress in closing a high-profile case that has drawn attention across the digital asset industry.

$10 Million Penalty for BitTorrent Developer Rainberry

As part of the proposed arrangement, Rainberry Inc., the firm responsible for developing the BitTorrent protocol, would pay a $10 million civil fine. The company would also be subject to a court order preventing it from engaging in misleading or deceptive conduct in securities offerings.

This penalty represents one of the key components of the settlement framework presented to the court.

SEC to Drop Remaining Claims Against Sun and Affiliates

In return, the SEC would drop its remaining allegations against Justin Sun and related organizations, including the Tron Foundation and the BitTorrent Foundation. The dismissal would be issued “with prejudice,” meaning the regulator would be barred from pursuing the same claims again in the future.

Sun welcomed the development in a public statement on Thursday.

“I am very pleased to confirm that the SEC has moved to dismiss all claims against me, Tron Foundation, and BitTorrent Foundation”, Sun said.
“While today’s resolution closes this chapter, I have continued building throughout the process. I remain committed to accelerating innovation in the United States and globally, and I look forward to collaborating with the SEC to shape future guidance and regulations for crypto”.

Background: Allegations of Unregistered Securities and TRX Market Manipulation

The proposed judgment marks a major step toward ending a case that began in 2023, when the SEC accused Sun and several of his companies of offering unregistered securities.

Regulators also alleged that Sun participated in market manipulation involving the TRX token, claiming that trading activity had been artificially inflated through wash trading practices.

Rainberry agreed to the settlement without admitting or denying the allegations, a common condition in many SEC enforcement agreements.

Court Approval Still Required

Before the agreement can take effect, it must be approved by a federal judge in the Southern District of New York. The court’s decision will determine whether the proposed resolution becomes legally binding.

Potential Shift in U.S. Crypto Enforcement Strategy

The timing of the settlement comes as U.S. regulators appear to be reassessing their strategy toward the crypto industry.

This shift follows the departure of former SEC Chair Gary Gensler, whose leadership was marked by a strong push to apply traditional securities laws broadly across the digital asset sector.

Sun’s Continued Influence in the Crypto Industry

Despite the legal battle, Justin Sun has remained an influential figure in the crypto ecosystem. Recently, he attracted attention due to reported connections with World Liberty Financial, a crypto-related project linked to allies of President Donald Trump.

Although the proposed settlement does not address those activities, resolving the SEC case could remove one of the most significant regulatory uncertainties surrounding Sun and his companies.

Critics Call the Settlement “Outrageous”

Not everyone supports the proposed resolution. Amanda Fischer, policy director and chief operating officer at financial reform group Better Markets, strongly criticized the SEC’s decision.

Fischer previously served as chief of staff to former SEC Chair Gary Gensler.

Speaking to Decrypt, she argued that the agreement was far too lenient.

“Even though the SEC had overwhelming evidence against Sun and his crypto businesses, the commission today entered into a sweetheart settlement,” she said.
“It appears to be an effort to save face, considering the scale and boldness of the alleged fraud”.

Fischer also urged the presiding judge to reject the settlement and called for Congress to review the SEC’s decision through oversight.