SEC and Justin Sun Pause Legal Battle to Explore Settlement
The US Securities and Exchange Commission (SEC) and crypto entrepreneur Justin Sun have jointly moved to pause their legal battle as they explore a potential settlement, as per a court filing submitted on Feb. 26. The request, filed in the US District Court for the Southern District of New York, asks Judge Edgardo Ramos to stay the case for at least 60 days. The SEC and Sun’s legal team stated that a pause would allow them to negotiate a resolution without the need for further litigation, benefiting the court and the public by conserving judicial resources. The court has yet to rule on the request.
SEC Allegations Against Justin Sun
- The SEC filed a lawsuit against Sun in March 2023, accusing him and his affiliated companies of engaging in the unregistered offering and sale of securities through TRON (TRX) and BitTorrent (BTT) tokens.
- The agency also alleged that Sun participated in “wash trading” to create misleading market activity and inflate trading volume for TRX.
- Additionally, the SEC’s complaint included allegations that Sun paid celebrities to promote TRX and BTT without disclosing their compensation.
Potential Impact of Settlement
The request to stay the case comes as the court was considering Sun’s motion to dismiss the lawsuit. Sun’s legal team argued that the SEC’s claims were legally flawed and that the case should be thrown out. If Judge Ramos grants the stay, the court would delay any ruling on that motion while discussions continue. Both parties emphasized that the delay would harm no party, including non-parties, and that court-imposed deadlines would not be affected. They also stated that a joint status report would be submitted within 60 days to update the court on the settlement progress. A settlement could signal that both sides see room for negotiation, as settlements have been common in similar SEC enforcement actions against crypto firms and executives. However, the details of any agreement, including whether Sun would admit to wrongdoing, remain unclear.
