The SEC proposed fining Rainberry – the company that owns BitTorrent – $10 million and withdrawing all remaining charges against Justin Sun, closing the lawsuit that began in 2023.
The U.S. Securities and Exchange Commission (SEC) has filed a draft final ruling with a federal court in New York, proposing a partial settlement to one of the most prominent enforcement cases in the cryptocurrency field. Under the ruling, Rainberry Inc. – the company behind the BitTorrent protocol and associated with TRON founder Justin Sun – will pay a $10 million civil penalty and will be injunctiond against engaging in misleading practices in securities offerings.
In return, the SEC will withdraw all remaining charges against Justin Sun and related organizations, including the TRON Foundation and the BitTorrent Foundation. Notably, the withdrawal of charges was done "with prejudice," meaning the SEC cannot re-file similar charges in the future.
Rainberry agreed to the settlement without admitting or denying wrongdoing – a standard provision in SEC enforcement cases. The ruling still needs to be approved by a judge in the Southern District of New York before it can take effect.
The deal sparks controversy amid SEC strategy adjustments.
The lawsuit was initiated in 2023 under Chairman Gary Gensler, when the SEC accused Sun and his companies of selling unregistered securities and manipulating the TRX Token market through fraudulent trading. This settlement reflects a significant shift in the agency's direction after Gensler left office – a period in which the SEC is seen as easing enforcement pressure across the entire cryptocurrency industry.
The decision to drop charges against Sun personally has drawn strong criticism from experts. Amanda Fischer, Director of Policy at the financial reform organization Better Markets and former Chief of Staff to Chairman Gensler, described the agreement as "outrageous."
She argued that even with strong evidence, the SEC had opted for a settlement that was too lenient given the scale and severity of the alleged fraud, and called on the judge to reject the agreement and for Congress to oversee the SEC's decision.
Despite ongoing legal risks, Justin Sun maintains considerable influence in the industry. He recently attracted attention in connection with World Liberty Financial, a cryptocurrency project allegedly linked to allies of President Donald Trump.
The settlement agreement doesn't mention these activities, but if approved by the court, closing the case would eliminate one of the most significant legal risks weighing on the TRON founder and the related ecosystem.
