The SEC and Tron founder Justin Sun have reached a $10 million settlement. Rainberry Inc., operator of the BitTorrent protocol and part of the Tron ecosystem since 2018, will pay the civil penalty.
In return, the SEC drops all claims against Sun, the Tron Foundation, and the BitTorrent Foundation. Sun and his companies neither admit nor deny wrongdoing as part of the agreement. Both sides filed the settlement motion on March 5 with the federal court in Manhattan. Judge Edgardo Ramos still needs to approve the deal. Once approved, the court will dismiss the remaining claims against Rainberry with prejudice, meaning the SEC cannot bring the same charges again.
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Original allegations: wash trading and celebrity promoters
In March 2023, the SEC filed suit against Sun, the Tron Foundation, the BitTorrent Foundation, and Rainberry. Charges included the sale of unregistered securities through the TRX and BTT tokens, market manipulation via wash trading, and undisclosed payments to celebrity promoters.
According to the SEC, Sun directed over 600,000 wash trades between two accounts he controlled. This allegedly generated $31 million in illegal proceeds. Celebrity promoters including Lindsay Lohan, Jake Paul, Akon, and Ne-Yo reportedly promoted Tron without proper disclosure. Then-SEC Chair Gary Gensler initiated the case, making crypto enforcement a centerpiece of his tenure.
At $10 million, the settlement stands in sharp contrast to the originally alleged $31 million in illegal proceeds. Separately, the SEC moved to dismiss the case against rapper DeAndre Cortez Way (Soulja Boy), who was also listed as a celebrity promoter.
Sun's political investments and the SEC's policy shift
This settlement comes during a period in which the SEC, under new Chair Paul Atkins, has been winding down numerous crypto cases from the Gensler era. Since January 2025, the agency has dropped or paused at least a dozen proceedings. Coinbase received a dismissal with prejudice and no penalty. So did Kraken. Simultaneously in May 2025, the agency dropped the lawsuit against Binance.
Sun himself had jointly requested a pause of his case with the SEC in February 2025. This happened shortly after Donald Trump began his second term. By that point, Sun was already deeply financially tied to Trump's crypto project World Liberty Financial (WLFI). In November 2024, he purchased $30 million in WLFI tokens, enabling the project to reach its first fundraising goal. By January 2025, he increased his total investment to $75 million and was appointed official advisor.
Beyond that, Sun spent over $20 million on Trump's $TRUMP memecoin. As the largest buyer, he received an invitation to the Trump dinner in May 2025. It was his first visit to the United States since the lawsuit was filed in 2023.
Criticism of the settlement: "gag order" or pragmatic solution
Critics view the agreement as a politically motivated concession. Amanda Fischer, Policy Director at Better Markets and former chief of staff to SEC Chair Gensler, called the settlement a "gag order" despite the SEC having "overwhelming evidence." Democratic politicians point to a pattern. Companies whose SEC cases were dropped each donated at least $1 million to Trump's inauguration. In total, crypto super PACs invested over $130 million in the 2024 election.
Both the SEC and Sun nonetheless deny any connection between the WLFI investments and the settlement. An SEC attorney described the agreement in court as "fair and reasonable." Sun himself stated that the settlement brings "closure" and that he would continue working to promote crypto regulation.
Notable, though, is the episode with World Liberty Financial itself. In September 2025, WLFI blocked Sun's blockchain address holding $595 million in still-locked tokens. Several outgoing transactions had been flagged, including one for $9 million. Sun demanded the release of his tokens. Clearly, the relationship between Sun and Trump's crypto project has not been frictionless.
Open questions and legal gaps
As a test case for classifying TRX and BTT as securities, the 2023 lawsuit could have set an important precedent. Yet the settlement leaves this question legally unanswered. Consequently, the crypto industry still lacks a precedent for the regulatory classification of layer-1 tokens.
TRX ranks among the ten largest cryptocurrencies by market capitalization. Meanwhile, the Tron network is primarily active in stablecoin transfers, particularly USDT. Sun acquired Rainberry, the operator of BitTorrent, in 2018 for approximately $140 million and integrated it into the Tron ecosystem.
Under Atkins, the SEC is moving toward negotiated settlements rather than aggressive litigation. Still, this approach leaves central regulatory questions unresolved rather than settling them. For Sun personally, the settlement represents significant relief. Instead of potentially hundreds of millions in penalties and years of court proceedings, Rainberry pays $10 million. Sun is free to travel to the United States again.
