SEC and Tron Founder Justin Sun Seek Stay Order in Civil Fraud Lawsuit
In a recent filing, the Securities and Exchange Commission (SEC) and Tron founder Justin Sun have jointly requested a stay order in their ongoing civil fraud lawsuit, hinting at the possibility of a resolution or settlement that could lead to the dismissal of the lawsuit.
The legal battle between the SEC and Justin Sun appears to be nearing its end, as the regulatory agency has been dropping lawsuits against various crypto firms in recent times. Notably, the SEC has resolved its case with Coinbase and closed its investigations into Uniswap and Robinhood.
The latest development in the case sees both parties seeking a stay order from the Southern District Court of New York, indicating a potential agreement on the horizon. While specific details of the potential settlement remain undisclosed, it is anticipated that Tron Founder Justin Sun may face some penalties as part of the resolution.
The SEC initially filed charges against Justin Sun and his affiliated companies, including Tron Foundation Limited and BitTorrent Foundation Ltd., in March 2023. The allegations centered around the unregistered offer and sale of crypto asset securities, namely Tronix (TRX) and BitTorrent (BTT), as well as accusations of market manipulation through wash trading.
Furthermore, the lawsuit highlighted Sun's involvement in paying celebrities to promote TRX and BTT without proper disclosure of compensation, a violation of securities laws. Despite initial arguments by Sun's legal team challenging the SEC's jurisdiction, subsequent evidence emerged in April 2024 linking Sun to substantial connections within the United States.
The most recent development occurred in October 2024 when the US District Court rejected a motion to dismiss a class-action lawsuit filed by TRX investors, indicating a prolonged legal battle for Sun and his entities.
Overall, the SEC's gradual resolution of enforcement actions against crypto entities signals a potential shift towards a more lenient approach within the industry, suggesting a readiness to move past these legal disputes.