Lawyers representing both Justin Sun and the U.S. Securities and Exchange Commission (SEC) are requesting a temporary suspension in the ongoing legal proceedings against the crypto entrepreneur. A filing submitted on Wednesday states that both parties agree it would be beneficial to pause the case while they explore the possibility of a resolution. The filing assures that no party or non-party will be negatively impacted by this delay.
This request follows a similar action in the case against Binance Holdings Ltd. and reflects broader changes in the regulatory approach to digital assets in the U.S. since President Donald Trump’s inauguration. Trump had campaigned on making the U.S. the “crypto capital of the planet.”
Both Sun and the SEC declined to provide further comment on the matter.
SEC Shifts Focus Under Acting Chair Mark Uyeda
Under the leadership of acting chair Mark Uyeda, the SEC has made notable adjustments in its regulatory stance toward the cryptocurrency industry. The SEC recently closed investigations into Robinhood Markets Inc.’s crypto operations, as well as inquiries into decentralized finance firm Uniswap and the nonfungible token (NFT) marketplace OpenSea. In one of the most significant developments, Coinbase Global Inc. revealed that the SEC had agreed to drop its lawsuit against the company, pending commissioner approval.
Uyeda, who took office shortly after Trump’s inauguration, announced the formation of a crypto-focused task force called “Crypto 2.0.” This task force is separate from the SEC’s enforcement division and aims to establish a more comprehensive and clear framework for regulating the cryptocurrency market.
A Shift from Gensler’s Aggressive Stance
The shift in regulatory priorities marks a departure from the approach taken by former SEC Chair Gary Gensler, under whose leadership the SEC pursued numerous penalties and lawsuits against crypto companies. Many in the crypto community celebrated Gensler’s resignation in January.
In 2023, the SEC under Gensler filed a lawsuit against Sun, accusing him of using his control over companies like the Tron Foundation, BitTorrent Foundation Ltd., and Rainberry Inc. to offer and sell unregistered securities.
Ties to Trump’s Crypto Project Raise Eyebrows
Sun’s involvement in the crypto world extends beyond his companies. He has invested $75 million in World Liberty Financial, one of Trump’s crypto ventures. As part of the project’s terms, 75% of the proceeds from token sales are paid to the Trumps, amounting to approximately $56 million.
Critics have raised concerns about the potential political influence shaping the SEC’s decisions. Corey Frayer, director of investor protection at the Consumer Federation of America, suggested that the agency’s shift in focus demonstrates how political connections may be influencing the regulation of the crypto industry.
Sun’s Public Persona and Crypto Connections
In addition to his business ventures, Sun has garnered attention in the art world. In 2019, he purchased a sculpture by artist Maurizio Cattelan — a banana taped to a wall — for a staggering $6.2 million. More recently, Sun made waves at the Consensus crypto conference in Hong Kong, where he participated in a panel alongside Zak Folkman, a co-founder of Trump’s crypto project.
During the event, Sun remarked on the rapid changes in the industry, stating, “Everything has changed dramatically since last year.”
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