TLDR
- Justin Sun and the SEC have collectively asked for a 60-day pause in their legal proceedings to consider settlement possibilities
- In March 2023, the SEC initiated legal action against Justin Sun, accusing him of offering TRX and BTT tokens without proper registration and engaging in wash trading
- Both sides assert that pausing the litigation would save court resources and serve the public interest
- This request for a pause comes as the court holds Sun's motion to dismiss the lawsuit under consideration
- This situation aligns with a broader change in the SEC’s tactics under the Trump administration, during which several crypto disputes have been settled
The ongoing legal conflict between the SEC and the crypto innovator Justin Sun has led both parties to jointly request a suspension of court activities.
The filing, submitted on February 26, 2025 A joint filing to the Southern District of New York requests Judge Edgardo Ramos to put the case on hold for 60 days.
The pause aims to enable both parties to discuss settlement possibilities and hopefully resolve the dispute outside of court.
According to the legal teams for Sun and the SEC, granting this pause could conserve resources and benefit the public.
Judge Ramos has yet to rule on this request; the court is still reviewing Sun’s attempt to have the lawsuit dismissed.
Legal Dispute
The legal dispute began in March 2023 This lawsuit filed by the SEC targets Justin Sun, the mind behind Tron. Tron founder and his corporate entities face SEC accusations for unauthorized securities offerings.
The SEC asserts that these offerings involve the Tron Foundation, BitTorrent Foundation, and Rainberry, Inc. in the unauthorized sale activities. of TRON (TRX) and BitTorrent (BTT) tokens.
Aside from its securities accusations, the SEC alleges that Sun was involved in wash trading—fictitious trading activities to feign market activity.
Wash trading was allegedly used to falsely boost the trading volume of TRX, giving the illusion of a highly active token.
Celeb Endorsements
The SEC also raises concerns about endorsement deals, alleging that celebrities were paid to promote tokens without appropriate disclosures.
Notable figures such as Lindsay Lohan and Soulja Boy were involved, and promoted TRX and BTT without disclosing financial incentives.
Several of these celebrities have settled with the SEC, choosing to pay fines without confessing to any misconduct.
The pause inquiry takes place during a notable transition in how the SEC regulates cryptocurrency, a trend noted since President Trump took office.
Acting SEC Chair Mark Uyeda has chosen to close inquiries into some crypto entities such as Robinhood, Uniswap, and OpenSea.
Most notably, Coinbase reported that the SEC is poised to drop its legal case against the exchange, contingent on commissioner approval.
These regulatory happenings coincide with Justin Sun’s recent $70 million token acquisition aimed at supporting World Liberty Financial (WLFI), a DeFi project linked to President Trump.
Corey Frayer, a primary figure in investor protection at the Consumer Federation of America, has indicated potential concerns of political dealings in the SEC appearing favorable to Trump allies.
Both the SEC and Sun’s legal representatives assure that a delay would cause no harm to involved parties, proposing to deliver a joint status report to the court within 60 days.
This report will reveal whether a settlement was achieved or if the case should move forward, with uncertainty about a possible Sun confession.
