Lawyers representing Justin Sun and the U.S. Securities and Exchange Commission (SEC) have jointly requested a stay in the regulatory proceedings against the cryptocurrency entrepreneur.
The request, outlined in a letter to U.S. District Judge Edgardo Ramos in Manhattan, suggests pausing the case for 60 days to explore potential resolutions, citing the interests of both parties and the public.
Justin Sun, a Chinese crypto entrepreneur and advisor to a blockchain project associated with former U.S. President Donald Trump, was sued by the SEC in March 2023.
Allegations of Crypto Fraud Against Tron Founder
The regulator accused Sun and his companies—Tron Foundation, BitTorrent Foundation, and Rainberry—of illegally distributing the crypto assets Tronix (TRX) and BitTorrent (BTT), manipulating trading volumes, and concealing payments to celebrity endorsers.
The SEC alleged that Sun’s scheme, which began in August 2017, generated $31 million in proceeds through deceptive trading practices. Its lawsuit was filed under the leadership of Chair Gary Gensler, who has been a strong proponent of stricter cryptocurrency regulations.
The SEC has recently paused or dropped several high-profile crypto lawsuits, including cases against Binance, OpenSea, Robinhood, and Uniswap. Speculation is growing that the commission may soon abandon its lawsuit against Ripple Labs, the issuer of XRP.
Sun’s Investment in Trump-Linked Crypto
Meanwhile, Sun has drawn attention for his significant investments in the World Liberty Financial token, a digital asset linked to Trump. Reports indicate Sun has spent at least $75 million on the token, raising concerns about potential conflicts of interest, given Trump’s financial stake in the project.
Trump has expressed strong support for the cryptocurrency sector, pledging to position the U.S. as a global leader in digital assets. His nomination of Paul Atkins, a pro-crypto lawyer, for SEC chair suggests a potential regulatory shift favoring the industry.
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