Key Highlights
- The SEC has dismissed all charges against Justin Sun, the Tron Foundation, and the BitTorrent Foundation; Rainberry Inc. will pay a $10 million civil penalty.
- The original 2023 lawsuit accused Sun of wash trading, selling unregistered securities, and secretly paying celebrities including Lindsay Lohan and Jake Paul to promote TRX and BTT tokens.
- Sun invested $75 million in Trump-backed World Liberty Financial ahead of the settlement, drawing accusations from Senate Democrats of a “pay-to-play scheme.”
The U.S. Securities and Exchange Commission (SEC) has settled its long-running fraud case against TRON Founder Justin Sun, dismissing all charges against Sun personally along with the Tron Foundation and BitTorrent Foundation.
Under the terms filed Thursday in the U.S. District Court for the Southern District of New York, Rainberry Inc., formerly BitTorrent Inc. and the company behind the BitTorrent protocol, will pay a $10 million civil penalty. Sun and his entities neither admitted nor denied any of the allegations.
“The SEC has moved to dismiss all claims against me, Tron Foundation and BitTorrent Foundation,” Sun said in a post on X. “Today’s resolution brings closure.”
The dismissal is with prejudice, meaning the SEC cannot refile the same allegations against the same conduct in federal court. The proposed final judgment still requires sign-off from U.S. District Judge Edgardo Ramos before it takes full effect.
What the original case alleged
The SEC filed its lawsuit against Sun in March 2023 under then-Chair Gary Gensler, who pursued over 100 crypto enforcement actions during his tenure. Unlike the registration-focused cases the agency dropped quickly after President Donald Trump took office, the Sun case carried deeper accusations that kept it alive longer.
The complaint alleged Sun and his companies sold unregistered securities through TRX and BTT tokens, artificially inflated TRX’s trading volume through coordinated wash trading between accounts they controlled, and ran a paid celebrity promotion scheme without disclosing compensation. Named promoters in the original suit included singer Akon, actress Lindsay Lohan, and YouTuber Jake Paul.
Sun had contested the SEC’s jurisdiction throughout, arguing the conduct was predominantly foreign and that he was not subject to U.S. personal jurisdiction as a foreign national.
The WLFI timeline
The settlement timeline has attracted political scrutiny. In November 2024, the same month Donald Trump won the presidential election, Sun became the largest single investor in Trump’s crypto project World Liberty Financial, committing $30 million. He raised his total stake to $75 million in January 2025. The following month, both Sun and the SEC jointly asked the court to pause the case to allow settlement talks.
Sun also purchased $100 million worth of the $TRUMP memecoin launched the weekend before Inauguration Day and was later invited to a private gala dinner hosted by Trump, where he was awarded with a “Trump Golden Torbillon” watch.
Political reaction
The resolution has drawn sharp criticism from Senate Democrats. Senator Elizabeth Warren, the top Democrat on the Senate Banking Committee, said, “The SEC should not be a lap dog for Trump’s billionaire buddies.”
Three House Democrats — Representatives Maxine Waters, Brad Sherman, and Sean Casten — had already warned in January that dropping the Sun case could undermine investor confidence in the regulator, and urged SEC Chair Paul Atkins to consider reopening it. They pointed to Sun’s WLFI purchases as evidence of a “pay-to-play scheme.”
The Sun settlement is the most politically contentious of more than a dozen crypto cases the SEC has dismissed since early 2025.
What it means for TRON
For the TRON ecosystem, the outcome removes the most prominent regulatory overhang that has shadowed the project since 2023. TRON currently settles over $86 billion in stablecoins, 98% of which is USDT, and recorded 994 million transactions in Q4 2025, a 16.5% increase over the prior quarter. Sun has also previously predicted that major TradFi institutions including BlackRock, Nasdaq, and NYSE will move onto blockchain rails for settlements and tokenized assets in 2026.
Furthermore, Sun said he intends to focus on accelerating innovation in the United States and looks forward to collaborating with the SEC on future crypto regulatory guidance.
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