SEC, Sun Pause Legal Battle for Settlement Talks

The U.S. Securities and Exchange Commission (SEC) and Justin Sun have requested a pause in their ongoing legal battle to facilitate settlement talks. A joint filing submitted to a Manhattan federal court on Feb. 26 stated that both parties are seeking a stay in the case to explore a potential resolution. The filing emphasized that pausing the case is in the best interest of both parties while they consider a potential settlement. If granted, the SEC and Sun will be required to submit a joint status report within 60 days.

This move is part of a recent trend by the SEC to drop or pause crypto-related cases, including those against Gemini, Coinbase, and OpenSea. Gemini co-founder Cameron Winklevoss has criticized the SEC's aggressive stance and called for reforms to prevent regulatory overreach. Meanwhile, former CFTC attorney Elizabeth Davis has suggested that the CFTC is better suited to regulate meme coins, given its focus on fraud prevention.

The SEC's case against Sun dates back to March 2023, when the regulator filed a lawsuit accusing him and three of his companies—TRON Foundation, BitTorrent Foundation, and Rainberry Inc.—of selling unregistered securities through the sale of TRON (TRX) and BitTorrent (BTT) tokens. The SEC also alleged that Sun engaged in manipulative wash trading of these tokens on secondary markets.

Sun initially sought to have the lawsuit dismissed, arguing that the SEC lacked jurisdiction over the matter as the token sales were predominantly conducted outside the United States. However, the SEC pushed back, stating that Sun's extensive travel in the U.S. made him subject to its oversight.

Sun's ties to former President Donald Trump extend beyond legal battles. He is the largest investor in Trump's crypto platform, World Liberty Financial, having invested a total of $75 million in the platform's native token, WLFI.

The SEC has also recently closed its investigation into crypto exchange Gemini. On Feb. 26, Gemini co-founder and president Cameron Winklevoss shared a notice from the SEC stating that, based on the information available, the agency will not be recommending any charges against the firm. However, the SEC made it clear that this decision does not constitute an exoneration and does not rule out future action should new information emerge.

Winklevoss expressed frustration over the impact the SEC's actions had on Gemini and the broader crypto