The U.S. Securities and Exchange Commission has resolved its three-year lawsuit against crypto entrepreneur Justin Sun and related entities with a $10 million settlement, the agency told a Manhattan federal court.
Under the agreement, Rainberry — one of Sun’s companies — will pay $10 million and the SEC will dismiss claims against Sun, the Tron Foundation and the BitTorrent Foundation. The parties said Sun and his companies neither admitted nor denied the SEC’s allegations.
The lawsuit, filed in March 2023, accused Sun, Rainberry, the Tron Foundation and the BitTorrent Foundation of selling unregistered securities through the Tronix (TRX) and BitTorrent (BTT) tokens and of engaging in manipulative wash trading of TRX. The SEC also alleged the defendants paid celebrities, including Akon, Lindsay Lohan and Jake Paul, to promote the tokens without disclosing the compensation.
Sun contested the allegations and argued the SEC was improperly applying U.S. law to mainly foreign conduct. The parties paused litigation to pursue settlement talks after Sun made large investments in a Trump-family crypto project: in November 2024 he became the largest investor in World Liberty Financial, initially buying $30 million in tokens and increasing that stake to $75 million by January 2025.
The settlement follows a pattern in which the SEC has stepped back from some crypto enforcement actions under the Trump administration; the agency has dropped or settled other high-profile cases filed under former chair Gary Gensler, including actions involving Kraken and Coinbase.
Three House Democrats — Maxine Waters, Brad Sherman and Sean Casten — had warned that leaving the SEC’s case unresolved could undermine investor confidence and urged then-SEC chair Paul Atkins to consider reopening the matter, raising concerns about a potential “pay-to-play” connection tied to Sun’s World Liberty investments.
After the settlement letter was filed, Sun posted on X that “today’s resolution brings closure” and said he looked forward to working with the SEC on developing crypto guidance and regulation going forward.