The SEC has dropped its lawsuit against TRON founder Justin Sun, reaching a $10 million settlement
TRON founder Justin Sun has reached a settlement with the U.S. Securities and Exchange Commission (SEC), agreeing to pay a $10 million fine in a case related to the sale of unregistered tokens.
Highlights
- TRON founder Justin Sun settles SEC case with $10M penalty.
- SEC drops claims against Sun, Tron Foundation, BitTorrent Foundation.
- Lawsuit alleged unregistered token sales and TRX wash trading.
A decision that satisfies both sides
The SEC has concluded a multi-year legal case against Sun involving allegations of fraud and violations of U.S. securities laws. In a letter filed Thursday with a federal court in Manhattan, the regulator said it would withdraw its claims against Sun and his affiliated companies — Tron Foundation and BitTorrent Foundation.
Under the settlement, one of Sun’s companies, Rainberry, will pay a $10 million penalty.
The SEC initially filed the lawsuit in March 2023. At the time, the regulator accused Sun and his companies of offering and selling unregistered securities through the TRON (TRX) and BitTorrent (BTT) tokens. The complaint also alleged that Sun engaged in so-called “wash trading” of TRX — transactions that may have created a misleading impression of market activity and demand.
The settlement leaves open questions
Sun’s settlement with the SEC is another example of how the U.S. regulator has resolved lengthy cases against crypto companies without taking them through a full court trial. In recent years, the SEC has increasingly opted for such agreements, which allow it to impose fines and record alleged violations without creating legal precedents that could limit the agency’s future enforcement actions.
At the same time, the $10 million penalty appears relatively modest compared with other SEC cases in the crypto industry. In disputes involving large crypto platforms and token issuers, the regulator has previously secured settlements worth hundreds of millions of dollars. This may indicate that the case against Sun had a more limited scope or that both sides preferred a faster resolution to avoid a prolonged legal battle.
As we wrote, Justin Sun top failures: Ambitions that fell short
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Angola
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