Justin has secured a $10 million settlement in a multi-year lawsuit filed by the United States Securities and Exchange Commission that accused the crypto entrepreneur of alleged fraud and securities violations.
Summary
- Justin Sun settled the SEC’s long-running lawsuit with a $10 million payment from Rainberry, bringing an end to allegations tied to TRX and BTT token sales and trading practices.
- The case, originally filed in 2023 under former SEC Chair Gary Gensler, accused Sun and affiliated entities of unregistered securities sales.
A letter from the SEC made public on Feb. 5 confirmed that neither Sun nor any of his companies involved in the case had admitted or denied the allegations, but the claims would be dropped following the payment of the fine.
With this, the SEC has wrapped up a three-year-long case that was filed under the leadership of former SEC Chair Gary Gensler, who was widely known for his regulation-by-enforcement approach.
Sun, along with affiliated entities including the Tron Foundation, BitTorrent Foundation, and Rainberry, was accused of selling unregistered securities involving TRX and BTT tokens. Further, the SEC alleged that Sun engaged in “manipulative wash trading” of TRX and paid celebrities like Akon, Lindsay Lohan, and Jake Paul to promote BTT without disclosing their compensation.
Sun has reiterated that the SEC’s complaints “lacks merit.”
Rainberry has agreed to pay a $10 million fine as part of the latest settlement.
“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,” Sun wrote in a recent X post.
The dismissal comes as no surprise because under President Donald Trump’s administration, the commission has taken a markedly pro-crypto stance and has dropped multiple enforcement actions that were previously brought against major industry players like Coinbase.
However, the decision to drop Sun’s case has also drawn scrutiny from some lawmakers, who believe the move may have been motivated by Sun’s financial ties to Trump-linked crypto ventures.
Soon after Trump’s election, Sun acquired $30 million worth of tokens linked to World Liberty Financial, which has direct links to the president’s family.
Democratic lawmakers, including Representatives Maxine Waters, Ritchie Torres, and Stephen Lynch, have argued that the circumstances surrounding the settlement warrant closer scrutiny and have requested the SEC to reopen the case.
