On March 5, 2026, the U.S. Securities and Exchange Commission (SEC) reached a settlement that dismissed the 2023 civil penalties against Justin Sun, popular Chinese crypto entrepreneur, the BitTorrent Foundation, and the Tron Foundation.
According to the U.S District Court‘s Final Judgement for the Southern District of New York on Thursday, in the context of this settlement, the SEC agreed to close the litigation that began in 2023.
The SEC Settlement Terms and Rainberry’s $10M Penalty
A Sun-related entity, Rainberry, which developed the BTT cryptocurrency token and the BitTorrent protocol under the Sun’s Leadership, was ordered to pay a $10 million civil penalty to the SEC for settling the case.
The SEC agreed to dismiss the remaining claims against Justin Sun, The Tron Foundation, and other connected foundation companies with prejudice, ensuring that the regulator cannot refile the same accusation in federal court.
To settle the case, a company under Sun’s leadership, Rainberry Inc., agreed to pay a $10 million civil penalty. The settlement was finalized without the defendants denying or admitting the accusation of the U.S. Securities and Exchange Commission of wash trading or market manipulation.
Additionally, Sun was charged with deceptive practices to manipulate the TRX price by paying celebrities to promote the token without disclosure.
The case settlement involves a permanent injunction against the Sun-affiliated company, prohibiting it from violating significant securities laws in connection with the sale or offer of unregistered securities, according to a court filing made public on Thursday.
The Thursday Filing added that the defendants agreed to the terms and conditions of the U.S. Securities and Exchange Commission without responding to the allegation. Further, without any guilt, Rainberry has agreed to never engage in misleading market conduct in securities. Court approval of the judgment for this case is still pending.
Political Fallout and Celebrity Settlements
In this situation, six of the celebrities, excluding Austin Mahone and musician Cortez “Soulja Boy” Way, agreed to pay approximately $400,000 in interest, penalties, and disgorgement to settle the fine without admitting guilt. Similarly, 8 celebrities, including Jake Paul and Lindsay Lohan, were suspected of illegally touting BTT and TRX tokens without revealing that they were being paid.
Justin Sun gave $75 million in tokens to World Liberty Financial, a crypto company owned by the Trump family, right before the regulatory bodies settled to withdraw the significant fraud claims filed against him.
Within the crypto community, opinions vary, with some suggesting that the legal win that Justin might have achieved in the current settlement case may have been impacted more by his political power and business favors rather than by a fair court decision.
Some U.S. lawmakers have publicly questioned the nature and timing of the settlement, arguing that Justin has a substantial financial connection to crypto firms that are linked to the Trump Family-raise concerns regarding the selective enforcement and creating the perception of a pay-to-play result rather than a direct judicial resolution.
Despite Justin and his companies winning in court, TRX, the native token of Tron, has failed to capitalize on this legal development, sustaining at approximately a value of $0.28 at the time of writing.
This case sustains a matter of political debate and public opinion, not something the actual governing body has formally ruled on.
