SEC Reaches Settlement with Sun Yuchen, Ending 3-Year Lawsuit with $10 Million Fine

According to documents filed Thursday with the Southern District Court of New York, the U.S. Securities and Exchange Commission (SEC) and Tron founder Sun Yuchen and his related companies have reached a final resolution after a long-standing lawsuit. The SEC has agreed to settle the case.

Under the proposed judgment, Sun Yuchen's Rainberry Inc. (the main operator of BitTorrent) will pay a $10 million fine, and the SEC will withdraw all remaining charges against Sun Yuchen and his related foundations.

Additionally, the SEC will dismiss its charges against rapper Soulja Boy separately, to fully close the case. However, the settlement still requires final approval from the federal court.

Looking back at the case, the SEC filed suit in 2023 against Sun Yuchen and his controlled entities Tron Foundation, BitTorrent Foundation, and Rainberry, accusing them of unregistered issuance and sale of crypto asset securities TRX and BTT.

The regulator also alleged that Sun Yuchen inflated TRX trading volume through false transactions and profited millions of dollars from illegal token sales. This case was also part of a series of high-profile enforcement actions the SEC launched against prominent figures in the crypto industry at the time.

In February of this year, at the joint request of both parties, the SEC paused its litigation against Sun Yuchen’s companies. Now, with the settlement agreement, this three-year legal battle is coming to an end.

This settlement is not an isolated event but occurs amid a significant shift in the SEC’s approach to enforcement in digital assets. Under new SEC Chair Paul Atkins, the agency has begun pausing some crypto-related cases and seeking negotiated resolutions.

However, this shift has also drawn criticism from some lawmakers. For example, Democratic members of the House have publicly questioned the commission’s decision to suspend enforcement actions, including the lawsuit against Sun Yuchen and Tron.

Overall, this settlement marks a substantial “cooling-off” in the long-standing tension between the SEC and the crypto industry.

This case also signals a change in regulatory tone, suggesting that the U.S. crypto compliance environment may enter a more rational adjustment period.