Justin settled a multi-year lawsuit filed by the United States Securities and Exchange Commission, which accused the crypto entrepreneur of fraud and securities violations.
Conclusion
- Justin Sun settled a long-running SEC lawsuit with a $10 million payment from Rainberry, ending allegations related to TRX and BTT token sales and practices.
- The first case, filed in 2023 under former SEC Chairman Gary Gensler, accused Sun and associates of selling unregistered securities.
In a letter from the SEC released on February 5, it confirmed that neither Sun nor any of its companies have admitted or denied the allegations in the case, but the allegations will be dismissed after the fine is paid.
With that, the SEC ended a three-year case brought under the leadership of former SEC Chairman Gary Gensler, who was widely known for his approach to regulation.
Sun, along with affiliates including the Tron Foundation, the BitTorrent Foundation, and Rainberry, were accused of selling unregistered securities with the tokens TRX and BTT. Furthermore, the SEC alleged that Sun engaged in a “manipulative laundering business” of TRX and paid celebrities such as Akon, Lindsay Lohan, and Jake Paul to promote BTT without disclosing their compensation.
The Sun reiterated that the SEC’s complaints “have no merit.”
Rainberry agreed to pay a $10 million penalty as part of the latest settlement.
“Today’s decision marks the end, but I have 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 future crypto guidelines and regulations,” Sun wrote in X’s latest post.
The dismissal comes as no surprise since under President Donald Trump’s administration, the commission has taken a significantly more pro-crypto stance, dropping numerous enforcement actions previously brought against major industry players such as Coinbase.
However, the decision to drop Sun’s case has also come under fire from some lawmakers, who believe the move was prompted by Sun’s financial ties to Trump-linked crypto businesses.
Shortly after Trump’s election, Sun acquired $30 million worth of tokens linked to World Liberty Financial, which has direct ties to the president’s family.
Democratic lawmakers, including Reps. Maxine Waters, Richie Torres and Stephen Lynch, have argued that the situation surrounding the settlement deserves a deeper investigation and have asked the SEC to reopen the case.
