SEC, Justin Sun Near Settlement in Crypto Fraud Case

The U.S. Securities and Exchange Commission (SEC) and Tron founder Justin Sun are reportedly nearing a settlement in their civil fraud case, according to a recent court filing. Both parties have requested a stay order from the Southern District Court of New York, which would temporarily halt further proceedings in the case.

The SEC filed charges against Sun and his companies in March 2023, alleging that they engaged in the unregistered offer and sale of crypto asset securities, specifically Tronix (TRX) and BitTorrent (BTT). The lawsuit also accused Sun of orchestrating a scheme to manipulate the secondary market for TRX through extensive wash trading and paying celebrities to promote TRX and BTT without disclosing their compensation.

In response, Sun's legal team argued that the SEC lacked jurisdiction, claiming that the activities in question were conducted outside the United States. However, in April 2024, the SEC amended its complaint, providing evidence that Sun had significant ties to the U.S.

Most recently, in October 2024, the U.S. District Court denied a motion to dismiss a class-action lawsuit brought by TRX investors. This denial suggests that the SEC's case against Sun and his companies may have gained traction.

As the SEC and Sun move towards a potential settlement, it remains to be seen what penalties Sun may face. However, the SEC's willingness to settle this high-profile case could signal a shift in its approach to regulating the crypto industry.