SEC and Justin Sun Move Toward Settlement in Civil Fraud Case

Flash

February 27, 2025 1:39 PM

In Brief
The SEC and Tron founder Justin Sun have requested a stay order in their fraud lawsuit.
Both parties are exploring a settlement that could lead to case dismissal.

The U.S. Securities and Exchange Commission (SEC) and Tron founder Justin Sun are nearing a settlement in their long-standing civil fraud case. According to a recent court filing, both parties have requested a stay order from the Southern District Court of New York, signaling ongoing negotiations to resolve the dispute.

The SEC initially charged Sun and his companies—Tron Foundation, BitTorrent Foundation, and Rainberry Inc.—in March 2023, alleging they engaged in the unregistered sale of securities, specifically Tronix (TRX) and BitTorrent (BTT). The lawsuit also accused Sun of market manipulation through wash trading and paying celebrities to promote TRX and BTT without proper disclosures.

Sun’s defense argued that the SEC lacked jurisdiction over his activities, but in April 2024, the regulator amended its complaint, citing Sun’s U.S. ties. The case saw further developments in October 2024, when a class-action lawsuit by TRX investors was allowed to proceed.

The SEC’s move toward settlement comes as the agency has recently dropped legal actions against several crypto firms, including Coinbase, Uniswap, and Robinhood. While details of the potential settlement remain undisclosed, it is expected that Sun could face financial penalties.

With regulatory scrutiny shifting, this resolution could mark another step in the SEC’s evolving approach to the crypto industry.

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