The U.S. Securities and Exchange Commission has moved to partially resolve its case against entrepreneur Justin Sun and associated entities. Under a proposed judgment, Rainberry Inc., the company behind BitTorrent, would pay a $10 million civil penalty and accept an injunction barring deceptive practices in securities offerings. In exchange, the SEC would dismiss its remaining securities and market-manipulation claims against Sun, the Tron Foundation, and BitTorrent Foundation.
The U.S. Securities and Exchange Commission moved to partially resolve its long-running enforcement case against crypto entrepreneur Justin Sun and several related entities. Under a proposed order, Rainberry Inc., the company behind the BitTorrent protocol, would pay a $10 million civil penalty and accept an injunction barring it from engaging in deceptive practices in securities offerings.
In exchange, the SEC would dismiss its remaining claims against Sun and affiliated entities, including the Tron Foundation and BitTorrent Foundation. The dismissal would be “with prejudice,” meaning the agency cannot bring the same claims again.
Rainberry agreed to the settlement without admitting or denying the allegations, a standard provision in SEC enforcement actions. The proposed judgment must still be approved by a federal judge in the Southern District of New York.
The move comes as U.S. regulators appear to be recalibrating their approach to crypto enforcement following leadership changes at the SEC. The case was first brought in 2023 and accused Sun and his companies of selling unregistered securities and manipulating the market for the TRX token through wash trading.
The dismissal of Sun’s case is “outrageous,” according to Amanda Fischer, policy director and COO at financial-reform group Better Markets. “Even though the SEC had overwhelming evidence against Sun and his crypto businesses, the commission today entered into a sweetheart settlement,” she stated, arguing it is a “face-saving measure, given the scope and brazenness of Sun’s alleged fraud.”
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 immediately respond to a request for comment.
