Justin Sun Case Nears End With SEC $10M Settlement

TLDR

• Rainberry to pay $10M civil penalty under proposed deal

• SEC to dismiss claims against Justin Sun and Tron entities

• Case began in 2023 over TRX and BTT token sales

• Settlement awaits approval by federal judge in New York

The U.S. Securities and Exchange Commission has filed a proposed judgment to resolve its case against Justin Sun. The filing was submitted in federal court in the Southern District of New York.

Under the proposal, Rainberry Inc. would pay a $10 million civil penalty. Rainberry is the company behind the BitTorrent protocol.

In exchange, the SEC would dismiss its remaining claims against Sun and affiliated entities. The dismissal would be with prejudice, preventing the agency from bringing the same claims again.

Terms of the Proposed Settlement

The proposed judgment requires Rainberry to accept an injunction. The order would bar the company from engaging in deceptive practices in securities offerings.

Rainberry agreed to the settlement without admitting or denying the allegations. This provision is standard in SEC enforcement actions. The SEC’s original complaint was filed in 2023. It accused Sun and related entities of offering unregistered securities tied to TRX and BTT tokens.

The agency also alleged that Sun orchestrated wash trading to inflate trading volume. The complaint stated that these trades were used to manipulate the market for TRX. The settlement must still receive approval from a federal judge. If approved, the case would be formally closed.

Dismissal of Claims Against Sun and Tron Entities

The SEC indicated it would dismiss claims against Justin Sun, the Tron Foundation, and the BitTorrent Foundation. The dismissal would end one of the agency’s most visible crypto enforcement actions.

In a post on X, Sun said he was pleased with the outcome. He wrote,

Sun added that he would continue focusing on innovation and regulatory engagement. He stated that he looks forward to working with regulators on future guidance.

The proposed resolution does not require Sun to admit wrongdoing. The agreement focuses on Rainberry’s penalty and compliance obligations. The SEC did not immediately provide additional public comment on the filing. The case remains pending judicial review.

Case Background and Regulatory Context

The enforcement action began under former SEC Chair Gary Gensler. It was part of a broader effort to apply securities law to digital assets. The complaint alleged that Sun and his companies made millions from token sales. It also claimed that certain trading activity created a false appearance of market demand.

In February 2025, the SEC paused the lawsuit following a joint request from both parties. The proposed settlement now marks a step toward final resolution. The agreement comes during a period of changes in the SEC’s crypto enforcement approach. Under current leadership, the agency has pursued negotiated outcomes in several digital asset cases.

Critics have raised concerns about the resolution. Amanda Fischer of Better Markets told Decrypt that the settlement was a “sweetheart” deal and urged judicial scrutiny. The proposed judgment does not address Sun’s other business activities. It focuses solely on the allegations related to TRX and BTT token offerings and trading practices.

If approved, the $10 million penalty would conclude a case that has been active for nearly three years. The court’s decision will determine the final outcome.

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