Three years of legal wrangling came to a quiet end last week when the U.S. Securities and Exchange Commission (SEC) walked away from one of its most high-profile crypto battles, after getting a $10 million settlement and dropping all charges against blockchain entrepreneur Justin Sun.
The SEC notified a Manhattan federal court on Thursday that Rainberry, one of Sun’s companies, will pay a $10 million fine. In return, the agency dropped all claims against Sun personally, along with the Tron Foundation and the BitTorrent Foundation. Neither Sun nor any of his companies admitted wrongdoing.
A Case Built on Token Sales and Celebrity Promotions
The SEC filed the lawsuit in March 2023, accusing Sun and his companies of selling unregistered securities via the Tronix (TRX) and BitTorrent (BTT) tokens. Regulators also said that Sun’s team did manipulative trading of TRX to show market activity. Beyond that, the SEC claimed Sun paid celebrities—including singer Akon, actress Lindsay Lohan, and YouTuber Jake Paul—to promote TRX and BTT without publicly disclosing their compensation. Sun denied all allegations and argued the SEC had no jurisdiction over what he called predominantly foreign conduct.
The settlement fits a broader pattern. Since the Trump administration took office, the SEC has retreated from several aggressive crypto enforcement actions launched under former chair Gary Gensler, including cases against Kraken and Coinbase.
Your completely free resource hub designed to boost your knowledge of cryptocurrencies
Sun’s Trump Ties Draw Scrutiny
The resolution also carries political weight. In November 2024, Sun became the largest single investor in World Liberty Financial, the Trump family’s crypto venture, committing $30 million in tokens—a figure he later raised to $75 million. The SEC and Sun jointly asked the court to pause proceedings for settlement talks shortly after.
Three House Democrats—Maxine Waters, Brad Sherman, and Sean Casten—had warned SEC chair Paul Atkins that closing the case could damage investor confidence and raised concerns about a possible pay-to-play arrangement. Sun, posting on X after the settlement was filed, said the resolution brings closure and expressed interest in helping shape future crypto regulation alongside the SEC.
