Justin Sun and the U.S. Securities and Exchange Commission (SEC) have sent a combined motion asking a federal judge to momentarily stop the regulator’s case against Sun and his linked entities. Sent to a Manhattan federal court on February 26, the application requests a 60-day stay to enable negotiations toward a possible settlement.
The filing claims that while they work toward a settlement, all sides believe that stopping the proceedings would be most beneficial. If they approve the stay, they will provide a joint status update within the designated term.
This evolution coincides with the SEC reassessing its position in several lawsuits involving cryptocurrencies. Signing a change in strategy toward industry litigation, the agency has since taken similar moves in instances against significant exchanges such as Binance and Coinbase.
Originally charging Sun in March 2023, the SEC claimed that he and his companies, Tron Foundation, BitTorrent Foundation, and Rainberry Inc., sold unregistered stocks illegally. The lawsuit also accused Sun of market manipulation, most especially of significant wash trading meant to artificially boost Tron (TRX) and BitTorrent (BTT) token trading volumes. The regulator further asserted that Sun paid celebrities to advertise these tokens without making appropriate disclosure.
Sun, who has refuted the claims, has tried to have the lawsuit thrown aside before. Given most of the claimed activity took place outside the United States, his legal team contended the SEC has no jurisdiction over the matter. The agency responded, however, that Sun’s regular trips to the United States and business activities there provide it the legal action authority.
Apart from his participation in the cryptocurrency market, Sun is also a major investor and consultant to World Liberty Financial, a blockchain initiative connected to former U.S. President Donald Trump. His large platform investments have attracted notice, especially in view of the SEC’s softening attitude toward crypto matters.
Although the SEC has not replied to the most recent motion, the case’s pause suggests a readiness to discuss a settlement instead of carrying on a protracted judicial conflict. Should the court approve the stay, the result of these negotiations might define the regulatory environment going forward for American bitcoin companies.
