SEC, Justin Sun Settle Lawsuit for $10M

The US Securities and Exchange Commission has ended its lawsuit against crypto entrepreneur Justin Sun with a $10 million settlement, wrapping up a three-year legal battle over alleged fraud and securities laws violations.

The SEC said in a letter to a Manhattan federal court on Thursday that Rainberry, one of Sun’s companies, would pay a $10 million fine, and claims against Sun and his companies, the Tron Foundation and BitTorrent Foundation would be dropped.

Sun and his companies did not admit or deny the SEC’s allegations, the agency said in the letter.

The SEC lawsuit, first filed in March 2023, accused Sun, Rainberry, the Tron Foundation and the BitTorrent Foundation of selling unregistered securities via the Tronix (TRX) and BitTorrent (BTT) tokens and engaging in “manipulative wash trading” of TRX.

The SEC also claimed Sun and his companies orchestrated a scheme to pay celebrities, including singer Akon, actress Lindsay Lohan and YouTuber Jake Paul, to promote TRX and BTT “without disclosing their compensation.” 

Sun refuted the allegations, arguing the case should be dismissed as the SEC was applying US law to “predominantly foreign conduct.”

It’s the latest crypto-related lawsuit the SEC has backed off from under the Trump administration. The agency has dropped or settled similar cases launched under former SEC chair Gary Gensler against Kraken and Coinbase, among others.

Lawmakers concerned over Sun’s Trump ties

In November 2024, the same month Donald Trump was elected president, Sun became the largest investor in the Trump family’s crypto project World Liberty Financial, buying $30 million worth of its tokens. 

He later upped his stake in World Liberty to a total of $75 million in January 2025, and a month later, the SEC and Sun asked the court to pause the case to allow for settlement talks.

The settlement comes after three House Democrats warned last month that leaving the SEC’s case against the Tron founder unresolved could ”undermine investors’ confidence” in the financial regulator.

Related: Rep Waters demands SEC oversight hearing about its approach to crypto

Representatives Maxine Waters, Brad Sherman, and Sean Casten urged SEC chair Paul Atkins to consider reopening its case against Sun and raised concerns of a “pay-to-play scheme,” pointing to Sun’s World Liberty token purchases.

Sun said in an X post shortly after the SEC filed its letter that “today’s resolution brings closure,” and he looked forward to “working with the SEC to develop guidance and regulations for crypto going forward.”

Magazine: SEC’s U-turn on crypto leaves key questions unanswered