SEC, Justin Sun Agree to 60-Day Pause in Legal Battle

The U.S. Securities and Exchange Commission (SEC) and cryptocurrency entrepreneur Justin Sun have jointly requested a 60-day pause in their ongoing legal battle to explore settlement options. The filing, submitted to the U.S. District Court for the Southern District of New York, seeks a stay in the case to allow both parties to discuss a potential resolution without further litigation.

The SEC sued Sun in March 2023 over unregistered securities offerings of TRX and BTT tokens and alleged wash trading. The regulatory body accused Sun and his companies, including the Tron Foundation, BitTorrent Foundation, and Rainberry, Inc., of conducting unregistered offerings and sales of these tokens. Additionally, the SEC claimed that Sun engaged in wash trading to inflate the trading volume for TRX.

The SEC's complaint also focused on celebrity endorsements, alleging that Sun paid celebrities like Lindsay Lohan and Soulja Boy to promote his tokens without proper disclosure. Several of these celebrities have since reached settlements with the SEC.

The request for a pause comes as the court was considering Sun's motion to dismiss the lawsuit. This development follows a shift in the SEC's approach to cryptocurrency regulation under the Trump administration, with several crypto-related cases being closed. Notably, Coinbase announced that the SEC has agreed to drop its lawsuit against the exchange, pending approval from commissioners.

Both parties argue that the pause would benefit the court and public by conserving judicial resources. They have stated that they would provide a joint status report within 60 days to update the court on their progress. The report will inform whether they have reached a settlement or if the case needs to proceed. No agreement has been finalized yet, and it remains unclear if Sun would admit to any wrongdoing as part of a potential resolution.