Sun Yuchen and the U.S. SEC reach a settlement! Tron lawsuit concludes, BitTorrent developers face a multi-million dollar fine

According to the final ruling issued by the Southern District Court of New York on March 5, the U.S. Securities and Exchange Commission (SEC) has officially settled with Tron and its founder Justin Sun, and has fully withdrawn a series of charges against Sun, the Tron Foundation, and the BitTorrent Foundation.
Under the settlement agreement, Rainberry (formerly BitTorrent Inc.), the company responsible for developing the BitTorrent protocol and issuing the BTT token under Sun’s leadership, will pay a civil fine of $10 million to the SEC.
In March 2023, the SEC filed a lawsuit against Justin Sun, the Tron Foundation, the BitTorrent Foundation, and Rainberry, accusing them of issuing and selling unregistered securities (TRX and BTT) and engaging in large-scale wash trading to manipulate the market.
According to the SEC’s complaint at the time, Sun was accused of conducting over 600,000 wash trades between April 2018 and February 2019 using controlled or proxy accounts, creating a false appearance of active trading and stable prices.
The SEC also alleged that Sun arranged for celebrity endorsements to hype TRX and BTT tokens. Among those involved were Hollywood actress Lindsay Lohan and well-known influencer Jake Paul, who were accused of “illegally promoting” cryptocurrencies without publicly disclosing compensation. Ultimately, except for rapper Soulja Boy and singer Austin Mahone, the other six celebrities paid $400,000 in ill-gotten gains, interest, and fines—without admitting to any wrongdoing—to settle the matter.
According to court documents disclosed on Thursday, the defendants accepted the SEC’s settlement terms “without admitting or denying” the allegations. Besides paying the fine, Rainberry also agreed, on a non-admission basis, to refrain from participating in any deceptive market practices related to securities in the future. However, the settlement is not final until approved by the court.
This settlement is not coincidental but reflects a broader shift in U.S. regulatory enforcement. Since Donald Trump returned to the White House, the SEC has been withdrawing lawsuits against cryptocurrency companies such as Binance, Coinbase, and Uniswap. As early as February this year, the SEC voluntarily requested a stay in the lawsuit against Justin Sun and Tron, paving the way for potential settlement negotiations.
Industry observers also believe that this settlement is closely related to Sun’s recent efforts to align politically with Trump’s camp.
Sun has invested heavily in crypto projects endorsed by the Trump family, including purchasing at least $75 million worth of World Liberty Financial tokens (WLFI) and spending up to $100 million on Trump-branded $TRUMP tokens just before the presidential inauguration. Additionally, it is reported that World Liberty Financial itself once held millions of dollars worth of TRX tokens, indicating a close intertwining of interests.