TLDR
- Justin Sun and the SEC have jointly requested a 60-day pause in their legal battle to explore settlement options
- The SEC sued Sun in March 2023 over unregistered securities offerings of TRX and BTT tokens and alleged wash trading
- Both parties argue the pause would benefit the court and public by conserving judicial resources
- The request comes as the court was considering Sun’s motion to dismiss the lawsuit
- This development follows a shift in SEC approach under Trump administration, with several crypto-related cases being closed
In the ongoing legal battle between the U.S. Securities and Exchange Commission (SEC) and cryptocurrency entrepreneur Justin Sun, both parties have jointly requested a pause in court proceedings.
The filing, submitted on February 26, 2025, to the U.S. District Court for the Southern District of New York, asks Judge Edgardo Ramos to stay the case for at least 60 days.
The joint request aims to give both sides time to discuss a potential settlement. This would allow them to resolve their differences without further litigation.
The SEC and Sun’s attorneys stated in their filing that this pause would benefit everyone involved. They argued it would save court resources and serve the public interest.
Judge Ramos has not yet made a decision on the request. The court was in the process of considering Sun’s motion to dismiss the case when this new filing was submitted.
Legal Dispute
The legal dispute began in March 2023 when the SEC filed a lawsuit against Sun. The regulatory body accused the Tron founder and his companies of conducting unregistered securities offerings.
These companies included the Tron Foundation, BitTorrent Foundation, and Rainberry, Inc. The SEC claimed they were involved in the unregistered offering and sale of TRON (TRX) and BitTorrent (BTT) tokens.
Beyond the securities allegations, the SEC also accused Sun of “wash trading.” This practice involves buying and selling the same asset simultaneously to create fake market activity.
The SEC alleged Sun was using wash trading to inflate the trading volume for TRX. This would make the token appear more active in the market than it really was.
Celeb Endorsements
Another part of the SEC’s complaint focused on celebrity endorsements. The agency claimed Sun paid celebrities to promote his tokens without proper disclosure.
These celebrities included actress Lindsay Lohan and rapper Soulja Boy. The SEC said they promoted TRX and BTT without telling their audiences they were paid for these endorsements.
Several of these celebrities have already reached settlements with the SEC. They agreed to pay fines but did not admit to any wrongdoing in these settlements.
The request for a pause comes at a time when there appears to be a shift in the SEC’s approach to cryptocurrency regulation. This change has been noted following the inauguration of President Donald Trump.
Under acting SEC Chair Mark Uyeda, the agency has closed investigations into several crypto companies. These include Robinhood, Uniswap, and the NFT marketplace OpenSea.
Perhaps most importantly, Coinbase announced that the SEC has agreed to drop its lawsuit against the exchange. This is still pending approval from the commissioners.
The timing of these developments has raised some questions. Justin Sun recently purchased over $70 million in tokens to support World Liberty Financial (WLFI), a DeFi venture connected to former President Trump.
Corey Frayer, director of investor protection at the Consumer Federation of America, has expressed concern. He suggested there might be “troubling politicization” of the SEC that appears to benefit “Trump’s business associates.”
Both the SEC and Sun’s legal team emphasized that the requested delay would not harm any parties involved. They stated they would provide a joint status report within 60 days to update the court on their progress.
The report will inform whether they have reached a settlement or if the case needs to proceed. No agreement has been finalized yet, and it remains unclear if Sun would admit to any wrongdoing as part of a potential resolution.
