SEC, Justin Sun, Tron Ask Court to Pause Fraud Case Over 'Potential Resolution'

The U.S. Securities and Exchange Commission, the Tron Foundation and Justin Sun filed a joint motion Wednesday asking a federal judge to pause the securities regulator's ongoing case against the crypto entrepreneur and his company.

The motion is similar to motions filed in the SEC's ongoing cases against Coinbase and Binance. In both cases, the parties said they were working toward a “potential resolution” of their cases. Coinbase CEO Brian Armstrong said last week that the SEC agreed to drop its case against the exchange outright, pending commissioner approval.

“In this case, the Parties submit that it is in each of their interests to stay this matter while they consider a potential resolution and agree that no party or non-party would be prejudiced by a stay,” Wednesday's filing said. “Further, a stay is in the Court‘s and the public’s interest because a resolution would conserve judicial resources by obviating the need for the Court to resolve the Defendants pending motion to dismiss the complaint.”

The SEC sued Tron, Sun and BitTorrent in July 2023, alleging the defendants engaged in market manipulation, fraud and issuing unregistered securities.

Sun tried to inflate the TRX token's volume through wash trading, the SEC alleged at the time. The regulator said Tron Foundation employees conducted over 600,000 wash trades.

District Court Judge Edgardo Ramos, who is overseeing the case, denied the SEC's effort to force Tron to file an additional response in pre-trial motions. Tron filed to motion to dismiss the lawsuit outright last year.

Sun is an adviser to World Liberty Financial, a company affiliated with U.S. President Donald Trump, after buying $30 million worth of the company's WLFI tokens. World Liberty, for its part, bought Tron's TRX token as part of its token treasury.