SEC Halts Tron Lawsuit: Trump Era Ushers In Crypto Regulation Reversal

The U.S. Securities and Exchange Commission (SEC) and Tron founder Justin Sun have jointly requested a stay in their civil fraud lawsuit, signaling a potential settlement in the case. This development is part of a broader trend of the SEC dropping or pausing cryptocurrency-related lawsuits under the new Trump administration.

Background

In March 2023, the SEC filed charges against Justin Sun and his companies, including Tron Foundation Limited and BitTorrent Foundation Ltd, alleging:

1. Unregistered offer and sale of crypto asset securities (TRX and BTT)
2. Market manipulation through wash trading
3. Undisclosed celebrity endorsements3

Recent Developments

On February 26, 2025, both parties filed a request with the Southern District Court of New York for a stay order, which would temporarily halt proceedings for at least 60 days14. This move suggests that the SEC and Sun are exploring a resolution or settlement that could lead to the dismissal of the lawsuit3.

Broader Context

This case is part of a significant shift in the SEC’s approach to crypto regulation under the Trump administration:

1. The SEC has recently dropped lawsuits against major crypto firms, including Coinbase.
2. Investigations into Uniswap and Robinhood have been closed.
3. The agency is rapidly unwinding its aggressive legal campaign against the crypto industry.

These changes align with President Trump’s executive order aimed at reshaping crypto regulation, which prohibited the creation of a central bank digital currency and established a crypto-focused task force.

Implications

The potential settlement between the SEC and Justin Sun could have far-reaching implications for the crypto industry:

1. It may signal a more lenient approach to crypto regulation under the current administration.
2. The outcome could set precedents for how similar cases are handled in the future.
3. It may provide clarity on the SEC’s stance regarding the classification of digital assets as securities2.

As the crypto industry awaits the resolution of this high-profile case, it remains to be seen how this shift in regulatory approach will shape the future of cryptocurrency in the United States.