The U.S. Securities and Exchange Commission (SEC) has officially submitted an application to the federal court in New York to withdraw all securities law charges against Justin Sun, the Tron Foundation, and the BitTorrent Foundation. As part of the settlement, Rainberry has agreed to pay a $10 million fine but has neither admitted nor denied the allegations. This case has drawn widespread attention from the crypto industry over nearly three years.
The SEC previously accused the TRX and BTT tokens within the Tron ecosystem of failing to register as securities during their issuance, constituting illegal securities sales. Additionally, the regulatory body pointed out that TRX was involved in a significant amount of “wash trading”—the practice of repeatedly buying and selling the same asset to artificially inflate trading volume, misleading the market's assessment of genuine demand. Such actions violate regulations related to anti-fraud and market transparency.
The investigation also revealed that Justin Sun's team collaborated with several public figures to promote TRX and BTT, posting misleading content on social media without clearly disclosing their financial compensation. This undisclosed promotional activity was deemed by the SEC as a violation of investment advertising disclosure rules. Several influencers involved have separately reached settlements with the SEC, collectively paying approximately $400,000 in fines.
The BTT token was launched in 2019 to provide an incentive mechanism for decentralized file-sharing services based on the Tron network. Despite its clear technical use, the SEC has included it within its securities regulatory framework for scrutiny. In the agreement, Rainberry committed to strictly avoiding any actions that could be deemed as market manipulation or misleading to investors in the future.
Currently, the settlement agreement still requires final approval from the federal court to take effect. This case marks a continued tightening by regulators on the issuance, marketing, and trading behaviors of crypto project tokens, serving as a compliance wake-up call for the industry.