Key Highlights
- In a final judgment filed on March 5, the SEC dropped all claims against TRON founder Justin Sun, along with the Tron Foundation and BitTorrent Foundations
- Since President Donald Trump took office in 2025, the SEC has dropped or paused many cases against the crypto industries
- The settlement requires only Rainberry Inc. to pay a $10 million civil penalty to settle the case
On March 5, the U.S. Securities and Exchange Commission filed a proposed final judgment in the Southern District of New York, which ended its 3-year-old enforcement action against TRON founder Justin Sun.
According to this settlement, Rainberry Inc. will have to pay $10 million in a civil penalty, which is the developer behind BitTorrent and owned by Justin Sun.
In return, the SEC will drop all remaining claims against Justin Sun, along with claims against the Tron Foundation Ltd. and BitTorrent Foundation Ltd.
Justin Sun Gets Relief in Unregistered Securities Case
The original lawsuit was filed in March 2023. At that time, Gary Gensler was still the Chair of the Securities and Exchange Commission and known for his hostile stance against the crypto sector. The complaint accused Justin Sun and his companies of breaking securities laws.
According to the SEC, Justin Sun conducted an unregistered securities offering. The tokens mentioned in the filing were TRON’s native token, TRX, and BitTorrent’s token, BTT.
The complaints also covered a scheme involving more than 600,000 wash traders. Wash trading is a market manipulation scam in which someone buys and sells the same asset to create fake trading volume. It allows scammers to create a fake hype.
The SEC also mentioned that Sun made paid promotions without disclosing them. Celebrities, including Lindsay Lohan, Jake Paul, and others, were named in the complaint. They allegedly promoted the tokens to their millions of followers without revealing they were paid to do so.
Former SEC Chair Gary Gensler mentioned in the press release, “As alleged, Sun and his companies not only targeted U.S. investors in their unregistered offers and sales, generating millions in illegal proceeds at the expense of investors, but they also coordinated wash trading on an unregistered trading platform to create the misleading appearance of active trading in TRX. Sun further induced investors to purchase TRX and BTT by orchestrating a promotional campaign in which he and his celebrity promoters hid the fact that the celebrities were paid for their tweets.”
However, Sun has always denied these allegations charged by the SEC. He has repeatedly mentioned that TRX and BTT are not securities. He also argued that the case was politically motivated from the start.
