SEC Settles Crypto Fraud Suit Against Justin Sun for $10M

The U.S. Securities and Exchange Commission announced a settlement on Thursday in its civil fraud lawsuit against cryptocurrency entrepreneur Justin Sun and affiliated companies, resolving allegations of securities law violations stemming from activities in 2018 and 2019. The agreement, filed in federal court in Manhattan, requires a Sun-controlled company to pay a $10 million penalty, while dismissing claims against Sun and other entities without any admission of wrongdoing.

The case originated in March 2023, when the SEC charged Sun, the Tron Foundation, the BitTorrent Foundation and Rainberry Inc. with conducting unregistered offerings and sales of the TRX and BTT cryptocurrency tokens. Regulators alleged that Sun directed employees to execute hundreds of thousands of wash trades, or self-trading transactions between accounts he controlled, to artificially inflate TRX trading volume and manipulate its price. These trades, averaging nearly 2,500 per day over an eight-month period, generated an illusion of market activity and helped Sun and his companies secure approximately $31 million in proceeds from token sales.

Additionally, the SEC accused Sun's entities of paying...