SEC Narrows Tron Case as Justin Sun Claims Are Dismissed
- The SEC ends claims against Justin Sun and Tron as Rainberry accepts a $10M penalty.
- The proposed judgment drops broader SEC claims and leaves Rainberry as the lone target.
- The settlement still needs court approval and bars Rainberry from future violations.
The U.S. Securities and Exchange Commission reached a settlement with the Tron network and its founder, Justin Sun, according to a court filing released Thursday. The agreement ends a 2023 lawsuit that accused the crypto entrepreneur and related companies of violating federal securities laws through the sale and promotion of Tron (TRX) and BitTorrent (BTT) tokens.
Under the proposed settlement, Rainberry Inc., a company tied to the Tron ecosystem, will pay a $10 million civil penalty and accept a permanent injunction against future violations involving securities regulations. The filing also confirms that the SEC will dismiss all claims against Sun, the Tron Foundation, and the BitTorrent Foundation with prejudice.
The decision narrows the regulator’s original enforcement action. The agreement now awaits approval from a federal judge before it can take effect.
Court Filing Details and Settlement Terms
The SEC filed the proposed final judgment on March 5, 2026. The document outlines the remaining penalties and the scope of the case dismissal.
As part of the settlement, Rainberry will only be subject to direct sanctions. The company must pay a $10 million civil penalty within 30 days after a federal judge approves the agreement. In addition, Rainberry will accept a permanent injunction preventing future violations involving alleged wash trading activity.
At the same time, the SEC will dismiss its remaining claims against Rainberry with prejudice. The filing also confirms that the regulator will drop all claims against Justin Sun, the Tron Foundation, and the BitTorrent Foundation.
The court document explains that a dismissal with prejudice prevents the SEC from bringing the same allegations again in the future for the same conduct.
“The Commission has reviewed and approved the terms of the settlement, as reflected in the Consent and proposed Final Judgment,” the filing states. “Rainberry, Justin Sun, the Tron Foundation, and the BitTorrent Foundation have consented to the entry of the Final Judgment.”
The proposed settlement does not include disgorgement of alleged proceeds. It also imposes no personal restrictions on Sun and requires no party to admit liability.
Background of the SEC’s 2023 Enforcement Case
The SEC filed its original complaint in 2023 during the leadership of former Chair Gary Gensler. Regulators accused Sun and affiliated companies of violating securities laws through the sale and promotion of TRX and BTT tokens.
The agency alleged that the tokens functioned as unregistered securities. It also accused the defendants of manipulating the secondary market for TRX through what regulators described as an extensive wash trading scheme.
According to the complaint, Sun and associates allegedly inflated trading volumes to increase demand for the cryptocurrency. The regulator also stated that Sun and one of his companies earned nearly $32 million from token sales in 2018 and 2019.
The lawsuit formed part of a broader wave of enforcement actions that targeted several cryptocurrency firms during that period. The SEC pursued registration violations and market manipulation allegations across multiple cases.
Political and Regulatory Context Around the Case
After President Donald Trump returned to office in January, the SEC began scaling back several enforcement actions against crypto companies. Acting Chair Mark Uyeda oversaw many of those changes before Paul Atkins later assumed leadership of the agency.
An investigation published by The New York Times in December reported that regulators had eased or paused more than 60 percent of crypto enforcement cases inherited from earlier administrations. In many situations, the agency froze litigation, reduced penalties, or dismissed claims.
The analysis also reported that some of the cases involved firms with financial ties to Trump. Sun had purchased about $75 million worth of World Liberty Financial tokens following Trump’s reelection in 2024.
Related: Justin Sun’s WLFI Wallet Blacklisted After $9M Transfer to HTX
Those tokens connect to a company partly owned by Trump and members of his family. By mid-2025, Sun’s total holdings, including unvested tokens, reportedly reached nearly $700 million.
The SEC paused its case against Sun last year while settlement discussions moved forward. The pause occurred alongside similar actions affecting other cryptocurrency firms. Meanwhile, Sun addressed the outcome in a statement posted on X. “Today’s resolution brings closure, but I never stopped building,” he wrote. “I will continue to focus on accelerating innovation in the United States and around the world and look forward to working with the SEC to develop guidance and regulations for crypto going forward.”
Spokespeople for Tron did not respond to requests for comment before publication. An SEC spokesperson also declined to comment on the settlement terms.
With the proposed judgment now before a federal judge, the outcome raises a broader question for the crypto industry: will similar enforcement cases follow the same path toward negotiated settlements?
