$10 million! Sun Yuchen reaches settlement with the SEC

The two-year enforcement case between the U.S. Securities and Exchange Commission (SEC) and Justin Sun has made significant progress.

On March 6, media reports indicated that, according to a proposed final judgment filed with the U.S. District Court in New York on Wednesday (March 4), the SEC will withdraw all remaining charges against Justin Sun and related entities on the condition that Rainberry, a company associated with the Tron blockchain, pays a $10 million civil fine. This settlement marks one of the most prominent enforcement actions by the SEC against the crypto industry nearing its conclusion.

Justin Sun announced on March 5 that all charges against him, the Tron Foundation, and the BitTorrent Foundation have been dismissed following SEC action. He also expressed his willingness to cooperate with the SEC to jointly develop future guidelines and regulations for cryptocurrency development.

Analysts note that this settlement will directly impact the market by removing the long-standing regulatory uncertainty hanging over the Tron ecosystem. Rainberry’s agreement to settle without admitting or denying the charges is a standard clause in SEC enforcement actions. However, the proposed judgment still requires final approval from a federal judge in the Southern District of New York.

SEC “Prejudicially” Dismisses Remaining Lawsuits

According to reports, under the proposed agreement, the SEC will dismiss the remaining charges against Justin Sun, the Tron Foundation, and the BitTorrent Foundation.

The proposed agreement states that the remaining lawsuits against Rainberry will be “prejudicially” dismissed, and all claims against Justin Sun, the Tron Foundation, and the BitTorrent Foundation will also be dismissed.

It is understood that “prejudicially” means the SEC will be barred from bringing similar cases based on the same conduct in the future.

The SEC has reviewed and approved the settlement terms, which are reflected in the consent decree and the proposed final judgment. Rainberry, Justin Sun, the Tron Foundation, and the BitTorrent Foundation have agreed to the final judgment’s enforcement.

This settlement occurs amid a clear shift in U.S. crypto regulatory policy. During former SEC Chair Gary Gensler’s tenure, a tough stance was taken to broadly apply securities laws to digital assets. Since his departure, regulatory agencies are re-evaluating their overall approach to crypto enforcement.

Recently, Justin Sun has also attracted attention due to his association with World Liberty Financial—a crypto project linked to allies of former President Donald Trump.

The proposed settlement does not involve the activities mentioned above, but its conclusion will eliminate the most prominent regulatory cloud over the Tron founder and his company.

In 2023, the SEC filed charges against Justin Sun, accusing him of selling unregistered securities through his controlled companies—the Tron Foundation, BitTorrent Foundation Ltd., and Rainberry Inc.—and manipulating the TRX token market through wash trading to deceive investors.

Notably, the settlement proposal is not without controversy. Amanda Fischer, Policy Director and COO of the financial reform organization Better Markets, strongly criticized the outcome. Fischer, who previously served as Chief of Staff to former SEC Chair Gensler, stated:

“Despite the SEC having substantial evidence against Justin Sun and his crypto operations, the commission has reached a lenient settlement today. Given the scale and audacity of the alleged fraud, this appears to be a face-saving measure.”

Fischer urged the presiding judge to refuse to approve the settlement and called for congressional oversight of the SEC’s decision.

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