SEC Settles Justin Sun Lawsuit for $10 Million, Drops Tron Fraud Charges

TLDR

• The SEC has ended its three-year lawsuit against Tron founder Justin Sun following a $10 million settlement
• Sun’s company Rainberry will pay the fine; charges against Sun, Tron Foundation, and BitTorrent Foundation are dismissed
• Sun and his companies did not admit or deny the allegations
• Sun had invested $75 million in Trump-linked crypto project World Liberty Financial before the settlement
• The settlement is still subject to federal judge approval

The SEC filed its original lawsuit in March 2023, accusing Sun and his companies of selling unregistered securities through the Tronix and BitTorrent tokens. The agency also alleged “manipulative wash trading” of TRX and a celebrity promotion scheme that hid paid endorsements.

Celebrities named in the case included singer Akon, actress Lindsay Lohan, and YouTuber Jake Paul. The SEC said they were paid to promote TRX and BTT without telling their audiences they were compensated.

Sun denied the allegations throughout the case. He argued the SEC was wrongly applying US law to what he called “predominantly foreign conduct.”

Under the settlement terms, Rainberry Inc. — one of Sun’s companies tied to the Tron network — will pay a $10 million fine. Rainberry is also barred from future violations of securities regulations.

All claims against Sun personally, along with the Tron Foundation and BitTorrent Foundation, will be dismissed with prejudice. That means the SEC cannot bring the same case again for the same conduct.

The SEC and Sun did not admit or deny the allegations as part of the deal.

Settlement Talks Began After Trump’s Return to Office

The case was paused in early 2025 to allow settlement negotiations. This came shortly after Donald Trump returned to the White House in January 2025.

Sun had become the largest investor in World Liberty Financial — a crypto project tied to the Trump family — in November 2024. He initially bought $30 million in tokens, later raising his total stake to $75 million. His overall holdings including unvested tokens reached nearly $700 million by mid-2025.

Three House Democrats — Maxine Waters, Brad Sherman, and Sean Casten — raised concerns last month. They warned that dropping the Sun case could “undermine investors’ confidence” in the SEC and pointed to what they called a potential “pay-to-play scheme.”

A Pattern of Dropped Crypto Cases Under New Leadership

The SEC under former chair Gary Gensler filed a wave of crypto lawsuits. After Trump took office, the agency began dropping or settling many of those cases.

Cases against Kraken and Coinbase were among those dropped. The SEC is now led by Chairman Paul Atkins.

The Justin Sun case was kept active longer than most because it included the more serious fraud and wash trading allegations, not just registration violations.

The proposed settlement still requires approval from a federal judge before it takes full effect.

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