- The SEC moved to partially settle its 2023 case against Justin Sun by requiring Rainberry Inc. to pay a $10 million penalty.
- In exchange, the agency will dismiss all remaining securities and market-manipulation claims against Sun and his affiliated entities, including the Tron and BitTorrent foundations.
- The move reflects a shift in U.S. crypto enforcement following the departure of former SEC chair Gary Gensler.
- Amanda Fischer of Better Markets called the settlement “outrageous” and a “sweetheart” deal.
The U.S. Securities and Exchange Commission took a major step toward ending its high-profile lawsuit against crypto entrepreneur Justin Sun on Wednesday, according to a proposed final judgment filed in a New York federal court. Under the proposed order, Rainberry Inc., which operates the BitTorrent protocol, has agreed to pay a $10 million civil penalty. Consequently, the SEC will dismiss all remaining claims against Sun and related entities, including the Tron Foundation and BitTorrent Foundation.
The case, first brought in 2023, accused Sun and his companies of selling unregistered securities and manipulating the market for the TRX token through wash trading. Rainberry accepted the settlement without admitting or denying the allegations, which is a standard provision in such actions. However, the proposed judgment must still receive approval from a federal judge in the Southern District of New York.
This resolution arrives as U.S. regulators appear to be recalibrating their enforcement strategy after the departure of former SEC chair Gary Gensler. Simultaneously, Sun has remained a prominent figure, recently drawing attention for his links to a crypto venture associated with allies of President Donald Trump. The settlement does not address these more recent activities but removes a significant regulatory overhang.
Criticism emerged quickly from financial reform advocate Amanda Fischer, who called the dismissal “outrageous.” She argued that “the judge presiding over Sun’s case should reject the settlement, and Congress should conduct oversight of the SEC’s decision.” The Tron Foundation and the SEC did not provide immediate comments to Decrypt.
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