The Blubber

The U.S. Securities and Exchange Commission (SEC) is considering a resolution in its high-profile civil fraud case against Justin Sun, the Chinese cryptocurrency entrepreneur and adviser to a crypto project backed by U.S. President Donald Trump.

In a letter sent Wednesday to U.S. District Judge Edgardo Ramos in Manhattan, attorneys for both Sun and the SEC requested a pause in proceedings, citing the interests of both parties and the public. They proposed providing a status update 60 days after the stay.

Sun’s legal team did not immediately respond to requests for comment, while the SEC declined to comment. It remains unclear whether the case will be resolved through a settlement or a dismissal.

The SEC filed suit against Sun and his companies—Tron Foundation, BitTorrent Foundation, and Rainberry—in March 2023.

The agency accused Sun of orchestrating an illegal scheme to distribute the crypto assets Tronix and BitTorrent, manipulate trading volume, and secretly pay celebrity endorsers to promote the tokens.

Trump has pledged to position the United States as a global leader in the cryptocurrency industry and has nominated Paul Atkins, a Washington attorney viewed as favorable to digital assets, to serve as SEC chair.

The SEC, under then-Chair Gary Gensler, who was criticized by the industry for pushing tighter cryptocurrency regulations, alleged that Sun’s scheme began in August 2017.

According to court documents, Sun illegally generated $31 million in profits by directing employees to conduct hundreds of thousands of Tronix trades between accounts he controlled, creating the illusion of legitimate market activity.

Sun, 34, was also accused of hiring celebrities—including actress Lindsay Lohan, singers Akon and Ne-Yo, and social media influencer Jake Paul—to promote Tronix and BitTorrent without disclosing that they were being paid.

SUN'S RECENT VENTURES

Recently, Sun has emerged as one of the most notable buyers of the World Liberty Financial token, a cryptocurrency in which Trump has a financial stake. Sun has reportedly spent at least $75 million acquiring the token, according to posts on social media platform X. Sun also serves as an adviser to World Liberty.

These transactions, involving an entity that benefits Trump financially, have raised concerns over potential conflicts of interest.

"The SEC possibly stepping back from Sun’s case might be good for one of the president’s crypto allies, but it’s damaging to an industry already struggling with credibility," said Corey Frayer, a former policy adviser to Gensler.

Beyond cryptocurrency, Sun has made waves in the art world. In November, he purchased a piece at a Sotheby’s auction for $6.2 million—a work consisting of a banana taped to a wall.

Earlier this month, he sued media mogul David Geffen over the return of "Le Nez," a sculpture by Swiss artist Alberto Giacometti. Sun originally bought the piece for $78.4 million in 2021, but claims his own art adviser stole it and later resold it. Geffen’s lawyer has publicly dismissed Sun’s claims as baseless.

In 2019, Sun gained further attention when he paid a then-record $4.57 million at a charity auction for a private lunch with billionaire investor Warren Buffett.