SEC Files Proposed Settlement to Drop Most Claims Against Sun

The U.S. Securities and Exchange Commission moved to end its civil case against Justin Sun and the Tron entities on March 5, 2026, after filing a proposed settlement in federal court. Under the deal, Rainberry Inc. would pay a $10 million civil penalty, while the SEC would dismiss its remaining claims against Rainberry and all claims against Sun, Tron Foundation Limited, and BitTorrent Foundation Ltd., if the court approves the resolution.

The SEC said the settlement covers its wash trading claim against Rainberry under Section 17(a)(3) of the Securities Act. The agency added that Rainberry would be permanently barred from violating that provision. At the same time, the regulator filed to dismiss a separate pending claim against DeAndre Cortez Way, known as Soulja Boy.

The case began in March 2023 and later expanded through an amended complaint in April 2024. The SEC had accused Sun and his companies of illegally distributing Tronix and BitTorrent tokens, inflating trading activity, and hiding payments to celebrity promoters. Reuters reported that the regulator alleged Sun generated about $31 million through fraudulent trades.

SEC narrows case to Rainberry wash trading claim

In its March 5 litigation release, the SEC said Rainberry allegedly facilitated wash trading in 2018 and 2019 to inflate TRX trading volume. The agency described wash trading as transactions without a real change in beneficial ownership, which can create a false picture of market demand.

The proposed judgment does not require Sun or the Tron entities to admit or deny wrongdoing on the settled claim. Reuters said the SEC confirmed that point in a letter to U.S. District Judge Edgardo Ramos in Manhattan. Court approval is still required before the settlement becomes final.

This outcome sharply reduces a case that once targeted several parts of the Tron ecosystem. Instead of pursuing the broader complaint through trial, the SEC is now asking the court to approve a narrower resolution centered on Rainberry and then close the rest of the action with prejudice.

Why the settlement matters now

Reuters reported that the SEC paused the case in February 2025 to explore a possible resolution. The settlement now lands during a wider shift in U.S. crypto enforcement, as the agency has recently pulled back or reworked several digital asset cases filed in earlier years.

Sun said on X that the SEC had moved to dismiss all claims against him, the Tron Foundation, and the BitTorrent Foundation, adding that the resolution brought closure. The SEC did not offer further public comment beyond its filing and litigation release.

For Tron, the immediate result is legal relief, but the court still has the final word. Until Judge Ramos signs off, the $10 million settlement remains a proposed deal rather than a completed judgment.