The SEC lawsuit against Justin Sun and Tron Foundation is the latest crypto-related case in which the securities regulator is seeking to pause its proceedings.
Yesterday, the U.S. SEC, Justin Sun, Tron Foundation, BitTorrent Foundation, and Rainberry filed a joint motion asking to stay their lawsuit for 60 days. The motion contended that the 60-day stay would enable the parties to explore a potential resolution.
According to the filing, this stay would benefit all the parties involved in the lawsuit, the court, and the public interest. If an early resolution is reached during the stay, the court will conserve judicial resources by avoiding ruling on the defendant’s pending motion to dismiss. The parties plan to issue a joint status report within 60 days of the request approval.
SEC v. Tron
In July 2023, the SEC charged Sun and his companies with fraud, market manipulation, and offering unregistered securities. The securities regulator accused Sun and Tron Foundation employees of inflating TRX volume through 600,000 wash trades.
However, Tron denied the allegation and filed a motion last year to dismiss the SEC’s complaint. U.S. District Judge Edgardo Ramos has not decided on Tron’s dismissal motion. Nonetheless, the parties are asking the court to freeze the lawsuit to explore a potential resolution.
SEC Pulls Back on Crypto-Related Litigation
This request is similar to a motion filed in the Binance lawsuit, which a federal judge recently approved. The development is part of the SEC’s efforts to end its multi-year enforcement action against the crypto industry.
After freezing the Binance case, the SEC agreed to drop the Coinbase lawsuit, pending approval from its commissioners.
Furthermore, the SEC ended its investigation into NFT trading marketplace OpenSea, decentralized exchange Uniswap, and crypto exchange Gemini. Last week, the commission dropped two appeals seeking to classify crypto businesses as security dealers.
Ripple Case Still Ongoing
While the SEC has paused and dropped several crypto-related lawsuits, the Ripple case remains ongoing in the Court of Appeals for the Second Circuit.
Renowned legal expert Jeremy Hogan emphasized that the Ripple case is more complex to resolve than the Tron lawsuit. According to him, the Tron lawsuit is still in its early stage and has not progressed like Ripple’s, which already has a court ruling.
This decision absolves Ripple of any wrongdoing during its retail sales of XRP. However, the court imposed a $125 million fine and injunction against the company for violating federal securities laws through its institutional sales.
With the SEC ending its enforcement actions against crypto businesses, several experts project that the commission could dismiss its case against Ripple by agreeing to a reduced penalty than the $125 million fine Judge Torres ordered.
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