Justin Sun, the billionaire founder of Tron and advisor to President Donald Trump’s crypto venture World Liberty Financial, just got relief from a major legal headache.
On Wednesday, the US Securities and Exchange Commission and Sun jointly asked a federal court to pause the agency’s enforcement case against the crypto mogul so they can “explore a potential resolution,” according to a court filing.
Legal retreats
The motion is similar to the one the SEC submitted earlier this month in connection with its enforcement lawsuit against Binance and co-founder and former CEO Changpeng Zhao.
It also punctuates a series of legal retreats the SEC has made in litigation against crypto companies as it reviews its approach to the digital assets sector.
On Friday, Coinbase CEO Brian Armstrong said on X that the SEC had dropped its lawsuit alleging the exchange was violating federal law by offering unregistered securities and operating as an unlicenced exchange.
In March 2023, the SEC accused Sun and three of his companies — the Tron Foundation Limited, BitTorrent Foundation Ltd., and Rainberry, Inc. — of fraud, market manipulation, and issuing unregistered securities.
Trump’s embrace
Sun denied the allegations and petitioned for the case to be dismissed last March. Sun did not immediately respond to a request for comment.
During his presidential campaign, Trump promised to end the “regulation by enforcement” crackdown pursued by the SEC’s former chair, Gary Gensler.
Welcoming Trump’s embrace, crypto leaders such as Coinbase, VC Marc Andreessen, and the Winklevoss twins, showered his campaign with largesse.
A trio of industry Super PACs — Fairshake, Protect Progress, and Defend American Jobs — spent $133 million on supporting crypto-friendly candidates in the election, including Trump, according to OpenSecrets.
Sun invested $75 million World Liberty Financial, the Trump family’s decentralised finance project, according to two posts he made on X.
World Liberty Financial also holds more than $9 million in Tron’s native TRX ($0.23) tokens, according to onchain data by Arkham Intelligence.
Now under the direction of interim Chair Mark Uyeda, the SEC is rapidly fulfilling Trump’s promises to the industry by dropping cases and restrictions imposed under the Biden administration.
More crypto cases appear headed for the dustbin.
On Wednesday, Cameron Winklevoss, the cofounder of the Gemini crypto exchange, announced that the agency had closed its case into the industry’s ninth-largest exchange and would not pursue any action against it.
The SEC charged Gemini with offering unregistered securities via the platform’s yield-earning program in January 2023. Gemini denied the allegations.
Sobering reality
In addition, the SEC has dropped or paused actions against Uniswap Labs, Robinhood’s crypto business, and OpenSea, the NFT ($0.00) marketplace.
For crypto sceptics, the industry’s victory over regulators is a sobering new reality.
“Once upon a time, the SEC was either filing, or winning, a crypto-case almost daily,” said John Reed Stark, the former chief of the agency’s Office of Internet Enforcement, a post on LinkedIn.
“Now the SEC is either closing, or dismissing, a crypto-case almost daily.”
Liam Kelly is a Berlin-based reporter for DL News. Got a tip? Email him at [email protected].
