The U.S. Securities and Exchange Commission (SEC), alongside the Tron Foundation and its founder Justin Sun, has jointly requested a federal judge to temporarily pause the ongoing fraud case against them. This move comes as they explore a potential resolution to the allegations put forth by the SEC.
Joint Motion for a Stay
On Wednesday, the parties filed a motion that echoes similar requests recently submitted in the SEC’s cases against prominent cryptocurrency exchanges Coinbase and Binance. In those instances, the involved parties noted that they were actively pursuing a resolution. Last week, Coinbase CEO Brian Armstrong revealed that the SEC had agreed to dismiss charges against the exchange, pending approval from the commission.
According to the filing, the parties believe that it is in their mutual interest to pause the proceedings while they consider a potential settlement. The document asserts that a stay would not prejudice any involved parties or non-parties. Additionally, it emphasizes that such a pause serves the interests of the court and the public, as it would conserve judicial resources by potentially eliminating the need to address the defendants’ pending motion to dismiss the complaint.
Allegations Against Tron, Sun, and BitTorrent
The SEC initiated its lawsuit against Justin Sun, the Tron Foundation, and BitTorrent in July 2023, alleging serious accusations including market manipulation, fraud, and the issuance of unregistered securities. The commission specifically accused Sun of attempting to artificially inflate the trading volume of the TRX token through wash trading practices. The SEC claimed that employees of the Tron Foundation engaged in over 600,000 instances of wash trades to create the illusion of increased market activity.
Court Proceedings and Developments
District Court Judge Edgardo Ramos, who is presiding over the case, previously denied the SEC’s request to compel Tron to submit an additional response as part of the pre-trial motions. The Tron Foundation had already submitted a motion to dismiss the lawsuit entirely last year, indicating their strong stance against the SEC’s allegations.
Justin Sun’s Business Ventures
In addition to his work with Tron, Justin Sun serves as an adviser to World Liberty Financial, a company connected to former U.S. President Donald Trump. Sun’s investment in World Liberty includes a substantial purchase of $30 million worth of WLFI tokens. Notably, World Liberty also acquired Tron’s TRX token as part of its token treasury, further intertwining the interests of Sun and the financial firm.
Conclusion
As the SEC, Justin Sun, and the Tron Foundation navigate this complex legal landscape, the request for a pause in proceedings highlights the ongoing efforts to seek a resolution that could potentially benefit all parties involved. The outcome of this case may have significant implications for the cryptocurrency industry, especially concerning regulatory practices and market conduct.
