Update (Feb. 26, 6:05 am UTC): This article has been updated to add information on the SEC’s suit, the Trump administration’s crypto policies and responses from the SEC and Tron.
The US Securities and Exchange Commission and Justin Sun have asked a federal court to pause the regulator’s case against the crypto entrepreneur to allow for settlement talks.
In a Feb. 26 filing to a Manhattan federal court, the SEC and Sun said they “jointly move to stay this case to allow the Parties to explore a potential resolution.”
“In this case, the Parties submit that it is in each of their interests to stay this matter while they consider a potential resolution,” the filing added.
The SEC and Sun asked the court to allow them 60 days to submit a joint status report if the stay is approved.
A highlighted excerpt from the SEC and Sun’s joint motion to stay. Source: CourtListener
It’s the latest crypto-related enforcement action the SEC has paused under the Trump administration as the regulator has also moved to stay or dismiss its cases against crypto exchanges Binance and Coinbase, among others.
US President Donald Trump had promised during his campaign to ease regulatory enforcement on the digital asset industry, vowing to make the country the “world capital” for crypto.
The SEC has reportedly prioritized pausing its crypto cases that have imminent deadlines and could later stay its lawsuits against crypto firms Kraken and Ripple, which have respective court deadlines in late March and mid-April.
In March 2023, the SEC sued Sun and three of his companies, the entity behind layer-1 blockchain Tron, the Tron Foundation and the file-sharing platform backers the BitTorrent Foundation and its San Francisco-based parent firm, Rainberry Inc.
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The regulator alleged Sun and the companies sold unregistered securities through the sale of the crypto tokens Tron (TRX) and BitTorrent (BTT) and engaged in “manipulative wash trading” of the tokens on secondary markets.
Sun had moved to dismiss the lawsuit, arguing the SEC had no sway over the token sales as it was “predominantly foreign conduct.” The agency argued that Sun “traveled extensively” throughout the US, which gave it jurisdiction.
Sun is the biggest investor in and an adviser to Trump’s crypto platform, World Liberty Financial, and has invested a total of $75 million through two major buy-ins of the platform’s self-titled token.
Sun (left) and World Liberty Financial co-founder Zak Folkman on stage at Consensus Hong Kong. Source: Consensus
He first bought $30 million worth of World Liberty Financial in November to become its largest investor, then upped his stake last month with an additional $45 million WLFI buy.
An SEC spokesperson said the agency declined to comment. A Tron spokesperson said the firm had no comment on pending legal matters.
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