A final judgment filed March 5 in the U.S. District Court for the Southern District of New York confirms that the SEC has formally settled with Tron and founder Justin Sun, dismissing all charges against Sun, the Tron Foundation, and the BitTorrent Foundation. The SEC originally sued in March 2023, alleging the unregistered offering and sale of securities (TRX and BTT) and massive wash trading to manipulate markets.
Settlement Terms: $10 Million Fine
Under the deal, Rainberry — formerly BitTorrent Inc., the company behind the BitTorrent protocol and BTT token — will pay the SEC a $10 million civil penalty. The defendants settled without admitting or denying the allegations. Rainberry also agreed to refrain from any deceptive market manipulation involving securities in the future. The settlement still requires final court approval.
SEC Allegations: Wash Trading and Celebrity Endorsements
The SEC's 2023 complaint accused Sun of orchestrating over 600,000 wash trades between April 2018 and February 2019 using controlled or proxy accounts to create the illusion of active trading and price stability. Sun was also charged with arranging celebrity endorsements — including Hollywood actress Lindsay Lohan and internet personality Jake Paul — to promote TRX and BTT without disclosing compensation. Six of the eight celebrities settled for $400,000 each without admitting guilt; rappers Soulja Boy and singer Austin Mahone did not settle.
Regulatory Pivot and Political Ties
The resolution is widely seen as part of a broader shift in U.S. enforcement under the Trump administration, which has seen the SEC drop lawsuits against Binance, Coinbase, and Uniswap. In February, the SEC requested a stay of proceedings against Sun and Tron to explore settlement options. Analysts note Sun's aggressive political investment in Trump-affiliated crypto projects: he purchased at least $75 million worth of World Liberty Financial's WLFI tokens and spent $100 million on the Trump-branded $TRUMP token ahead of the inauguration. World Liberty Financial itself held millions of dollars in Tron's TRX token, creating deep financial intertwinement.
Criticism: SEC's 'Great Retreat'
Three Democratic House members in January slammed the SEC's decision to drop multiple crypto enforcement actions, calling it a "great retreat" and singling out the Sun case. They noted that crypto companies contributed at least $85 million in political donations during Trump's re-election campaign. Since early 2025, the SEC has dismissed more than 10 crypto lawsuits, fueling questions about the link between regulatory actions and political contributions.