SEC Withdraws Market Manipulation Charges Against Justin Sun

NEW YORK (Azat TV) – The U.S. Securities and Exchange Commission (SEC) has dismissed the claims it filed last year against Justin Sun, the founder of the Tron cryptocurrency, along with the Tron Foundation and the BitTorrent Foundation. The development comes as Rainberry, the company formerly known as BitTorrent Inc., has agreed to a $10 million settlement with the regulatory body.

SEC Dismisses Claims Against Sun and Foundations

The SEC’s decision, detailed in a filing with the U.S. District Court for the Southern District of New York, marks a significant turn in the legal proceedings initiated in 2023. The agency had accused Sun of orchestrating a scheme to artificially inflate the trading volume of Tron’s native token, TRX, through wash trading. The lawsuit also alleged that Sun and the foundations improperly touted TRX and the BitTorrent token (BTT) as investments, failing to register their offerings.

BitTorrent Inc. Agrees to $10 Million Settlement

While the charges against Sun and the foundations have been dropped, Rainberry, the entity that acquired BitTorrent in 2018, has opted to settle the SEC’s claims. The company agreed to pay a $10 million civil penalty. This settlement resolves allegations that Rainberry, through its actions related to BitTorrent’s initial coin offering (ICO) and subsequent token distributions, violated securities laws. The SEC had previously sought to bar Sun from participating in the digital asset industry and to obtain disgorgement of allegedly ill-gotten gains.

Legal Proceedings and Background

The original lawsuit, filed in March 2023, cast a wide net, also naming celebrity influencers and associated entities. The SEC’s strategy often involves targeting not only the primary actors but also those who promote or facilitate the distribution of unregistered securities. The dismissal of claims against Sun and the foundations, while Rainberry settles, suggests a strategic recalibration by the SEC, potentially focusing resources on the parties deemed most amenable to resolution or those with clearer liability.

The SEC has been increasingly active in its pursuit of alleged unregistered securities offerings within the cryptocurrency space, aiming to bring greater regulatory clarity and investor protection. This case, however, highlights the complex and evolving nature of digital asset regulation, where entities may face differing outcomes based on their specific actions and willingness to cooperate with authorities.

The dismissal of claims against Justin Sun, the Tron Foundation, and the BitTorrent Foundation, juxtaposed with Rainberry’s settlement, indicates a nuanced approach by the SEC to resolving complex cryptocurrency enforcement actions, potentially prioritizing achievable outcomes and regulatory compliance over protracted litigation for all parties involved.