The U.S. Securities and Exchange Commission moved to partially resolve its long-running enforcement case against crypto entrepreneur Justin Sun and several related entities, according to a proposed final judgment filed Wednesday in federal court in New York.

Under the proposed order, Rainberry Inc., the company behind the BitTorrent protocol, would pay a $10 million civil penalty and accept an injunction barring it from engaging in deceptive practices in securities offerings.

In exchange, the SEC will dismiss its remaining claims against Sun and affiliated entities, including the Tron Foundation and BitTorrent Foundation. The dismissal would be “with prejudice,” meaning the agency cannot bring the same claims again.

In an emailed response, Tron representatives pointed to Decrypt to a public statement made by Sun on X.

“I am very pleased to confirm that the SEC has moved to dismiss all claims against me, Tron Foundation, and BitTorrent Foundation,” Sun wrote Thursday. “Today’s resolution brings closure, but I never stopped building. I will continue to focus on accelerating innovation in the U.S. and around the world and look forward to working with the SEC to develop guidance and regulations for crypto going forward.”

The filing represents a significant step toward closing a case first brought in 2023 that accused Sun and his companies of selling unregistered securities and manipulating the market for the TRX token through wash trading.

Rainberry agreed to the settlement without admitting or denying the allegations, a standard provision in SEC enforcement actions.

The proposed judgment must still be approved by a federal judge in the Southern District of New York.

The move comes as U.S. regulators appear to be recalibrating their approach to crypto enforcement following the departure of former SEC chair Gary Gensler, whose tenure was marked by an aggressive push to apply securities law across the digital-asset sector.

Sun has remained a prominent figure in crypto and has recently drawn attention for his links to World Liberty Financial, a crypto venture associated with allies of President Donald Trump.

The proposed settlement does not address those activities, but the case’s resolution would remove one of the most visible regulatory overhangs surrounding the Tron founder and his companies.

The dismissal of Sun’s case is “outrageous,” according to Amanda Fischer, policy director and COO at financial-reform group Better Markets, who served as chief of staff to former SEC Chair Gary Gensler.

“Even though the SEC had overwhelming evidence against Sun and his crypto businesses, the commission today entered into a sweetheart settlement,” she told Decrypt. “It is a face-saving measure, given the scope and brazenness of Sun’s alleged fraud.”

She argued that the judge presiding over Sun’s case should reject the settlement, and Congress should conduct oversight of the SEC’s decision.

The SEC did not immediately respond to Decrypt’s request for comment.

Editor’s note: Adds comment from Amanda Fischer and Justin Sun’s public statement.

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Author: Sebastian Sinclair