US regulatory policy on crypto has taken a dramatic turn since Donald Trump was elected in the recent political shift. One of the biggest changes is the SEC’s practice regarding litigation. Most recently, the agency has agreed with Tron founder Justin Sun to pause their legal case against him. This news comes amid deepening ties to Trump’s business empire.
On February 26, the Securities and Exchange Commission (SEC) and Justin Sun requested a 60-day pause on their legal proceedings. The request, citing public interest, suggests that the parties are negotiating a settlement.
The lawsuit, initiated in March 2023, accused Sun and his companies, Tron Foundation, BitTorrent Foundation, and Rainberry, of several securities-related crimes. First, the SEC accused Sun of illegally offering crypto assets, including the BitTorrent token.
The lawsuit also alleged that he artificially inflated the price of these tokens through wash trading. Sun also allegedly paid celebrities, including Lindsay Lohan and Jake Paul, to promote the tokens without proper disclosure to the public.
It is still unclear whether the SEC plans to drop the charges against Sun or seek a settlement. It is also unclear what the potential settlement would involve. In any case, the move signals a departure from the SEC’s previous practices regarding litigation with crypto firms.
Justin Sun Strengthens Ties with Donald Trump
Since the departure of SEC’s former Chair, Gary Gensler, the agency has adopted a more crypto-friendly stance. Under the new Trump-appointed Acting Chair, Paul Atkins, the SEC seeks to wrap up its litigation against several companies.
Still, this news highlighted Justin Sun’s recent ties to Trump-linked businesses. Sun is an adviser to World Liberty Financial, a crypto firm partially owned by Trump and his family. On January 19, Sun announced that he would increase his stake in the firm’s crypto token WLFI, resulting in $75 million.
At the same time, reports surfaced that World Liberty Financial planned to invest in Tron tokens for its treasury. This is significant because Sun, as the founder of Tron, still holds considerable influence over the project.
These developments indicate close ties between Sun’s business empire and Trump, raising concerns about potential conflicts of interest between business involvements and personal relationships.
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