- The SEC moved to resolve its 2023 fraud case against Tron founder Justin Sun.
- A proposed settlement requires Rainberry Inc. to pay a $10 million penalty.
- Regulators will dismiss all claims against Sun, the Tron Foundation, and the BitTorrent Foundation.
The US Securities and Exchange Commission (SEC) moved to end its civil fraud case against crypto entrepreneur Justin Sun.
A proposed settlement filed in federal court in New York shows that Rainberry Inc., the company tied to the BitTorrent protocol and associated with Sun’s Tron network, will pay a $10 million civil penalty.
The firm will also accept an injunction barring it from engaging in deceptive conduct in securities offerings.
In exchange, the SEC will dismiss the remaining claims against Sun and his affiliated entities, including the Tron Foundation and BitTorrent Foundation. The dismissal would be “with prejudice,” meaning the agency cannot reopen the same claims in the future.
The settlement still requires approval from a federal judge in the Southern District of New York.
Case Origin and Market Manipulation Claims
The SEC first filed the lawsuit in March 2023. At the time, regulators accused Sun and his companies of violating federal securities laws through the sale and distribution of Tron (TRX) and BitTorrent (BTT) tokens.
The complaint also alleged an extensive wash trading scheme designed to manipulate TRX market activity. According to the regulator, Sun directed employees to execute hundreds of thousands of trades between accounts he controlled.
The goal allegedly was to use artificial trading activity to create the appearance of higher liquidity and demand. That appearance would attract outside traders and allow Sun to sell tokens into the market while keeping price movement stable.
The SEC also claimed the operation generated roughly $31 million in proceeds.
The regulator also claimed that Sun hired celebrities, including Lindsay Lohan, Akon, Ne-Yo, and Jake Paul, to promote Tron-related tokens without disclosing they were paid endorsements.
Rainberry agreed to the settlement without admitting or denying the allegations, which is standard in SEC enforcement actions. Sun also acknowledged the settlement and stated that he “never stopped building.”
Political Backlash Over the Settlement
Senator Elizabeth Warren, the top Democrat on the Senate Banking Committee, said the decision raised serious concerns about regulatory independence. She argued the SEC should not act in favor of wealthy allies connected to the president. Waren said,
“The SEC should not be a lap dog for Trump’s billionaire buddies, and any crypto legislation moving through Congress must stop the President’s crypto corruption.”
It is important to note here that Sun invested at least $75 million in World Liberty Financial, a crypto venture connected to Trump and his sons that launched in 2024. By mid-2025, his holdings in the project were reported to be worth nearly $700 million.
Related: Justin Sun’s Ex-Girlfriend Alleges Identity Fraud, TRX Price Manipulation
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