TLDR
- A three-year legal battle between the SEC and Tron founder Justin Sun has concluded with a $10 million settlement agreement
- Rainberry, Sun’s company, will pay the settlement amount while all charges against Sun personally, Tron Foundation, and BitTorrent Foundation are dismissed
- Neither party admitted or denied wrongdoing as part of the settlement terms
- Prior to the settlement, Sun had invested $75 million in World Liberty Financial, a Trump-associated crypto venture
- A federal judge must still approve the settlement for it to become final
In March 2023, the SEC initiated legal proceedings against Sun and his affiliated companies, claiming they sold unregistered securities via the Tronix and BitTorrent tokens. The regulatory body further alleged that Sun engaged in “manipulative wash trading” of TRX and orchestrated a celebrity endorsement scheme where paid promotions were not properly disclosed.
JUST IN: 🇺🇸 SEC ends case against Tron Founder & crypto billionaire Justin Sun. pic.twitter.com/hb8j85T0eO
— Watcher.Guru (@WatcherGuru) March 5, 2026
The lawsuit named several high-profile celebrities, including recording artist Akon, Hollywood actress Lindsay Lohan, and social media personality Jake Paul. According to the SEC, these individuals received compensation to promote TRX and BTT tokens without informing their followers about the financial arrangements.
Throughout the legal proceedings, Sun maintained his innocence. His defense centered on the argument that the SEC was improperly extending US jurisdiction over what he characterized as primarily international business activities.
According to the settlement agreement, Rainberry Inc. — a Sun-affiliated entity connected to the Tron blockchain — will pay the $10 million penalty. Additionally, Rainberry faces restrictions preventing future violations of securities laws.
Meanwhile, all allegations against Sun in his individual capacity, as well as those against the Tron Foundation and BitTorrent Foundation, will be dismissed with prejudice. This legal designation prevents the SEC from pursuing identical charges for the same conduct in the future.
Both the SEC and Sun refrained from admitting or denying the allegations under the settlement agreement.
Settlement Talks Began After Trump’s Return to Office
Legal proceedings were temporarily halted in early 2025 to facilitate settlement discussions. This pause occurred shortly following Donald Trump’s January 2025 return to the presidency.
By November 2024, Sun had positioned himself as the primary investor in World Liberty Financial — a cryptocurrency initiative connected to the Trump family. His initial purchase of $30 million in tokens grew to $75 million. When including unvested tokens, his total position approached $700 million by mid-2025.
A trio of Democratic House members — Representatives Maxine Waters, Brad Sherman, and Sean Casten — voiced objections last month. They cautioned that dismissing the Sun prosecution could “undermine investors’ confidence” in the regulatory agency and highlighted concerns about a possible “pay-to-play scheme.”
A Pattern of Dropped Crypto Cases Under New Leadership
During Gary Gensler’s tenure as SEC chair, the agency pursued an aggressive enforcement strategy against cryptocurrency companies. Following Trump’s inauguration, the regulatory body shifted course, dropping or resolving numerous pending cases.
Notable dismissals included enforcement actions against Kraken and Coinbase. The commission is now headed by Chairman Paul Atkins.
The Sun prosecution remained active longer than comparable cases due to the inclusion of more severe fraud and market manipulation allegations, beyond simple registration infractions.
I am very pleased to confirm that the SEC has moved to dismiss all claims against me, Tron Foundation, and BitTorrent Foundation.
Today’s resolution brings closure, but I never stopped building. I will continue to focus on accelerating innovation in the United States and around…
— H.E. Justin Sun 👨🚀 🌞 (@justinsuntron) March 5, 2026
Following the settlement filing, Sun shared on X: “Today’s resolution brings closure, but I never stopped building.”
Final approval from a federal judge is required before the settlement becomes legally binding.
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