Trump-Backed Crypto Investor Gets Breather as SEC Halts Fraud Case

New York, NY — A $75 million investment by crypto entrepreneur Justin Sun in a Trump family-backed digital token has garnered significant attention after federal regulators agreed to pause civil fraud proceedings against him this week.

On Wednesday, lawyers representing the U.S. Securities and Exchange Commission (SEC) and Sun filed a request with a federal judge to temporarily halt the agency’s ongoing case, citing mutual interests and the greater public good. This decision marks a notable shift for the SEC, which had previously accused Sun and his companies — Tron, BitTorrent, and Rainberry — of selling unregistered securities and manipulating the market for the digital token Tronix.

Sun, a controversial figure in the cryptocurrency landscape, has risen to prominence by investing heavily in the World Liberty Financial project, a crypto initiative closely associated with the Trump family. His recent acquisition of World Liberty tokens could yield substantial financial benefits for the Trumps, who are entitled to 75% of the token revenues. Furthermore, Sun serves as an official adviser to World Liberty, promoting President Donald Trump as the project’s “chief crypto advocate” and naming his son Barron as the “DeFi visionary.”

World Liberty is just one of several cryptocurrency ventures launched by the Trump family in recent months, raising alarms over potential conflicts of interest. Critics express concerns about the ease with which crypto can be used to funnel money into assets benefitting the president and his relatives. “Now anyone in the world can essentially deposit money into the bank account of the President of the USA with a couple of clicks,” tweeted Anthony Scaramucci, who previously served as the Trump administration’s communications director. “Every favor—geopolitical, corporate, or personal— is now on sale, right out in the open.”

While the SEC did not comment on the matter, responses from the White House and Sun’s team were also absent. Law professor Richard Painter of the University of Minnesota warned about the implications of the SEC’s stance. “I guess this is going to be the new approach — hands off crypto, not enforcing fraud … and I don’t think it’s going to end well,” Painter commented. “The SEC is going to back off — because that’s what the Trump administration wants — and that’s a very worrisome situation.”

In a related development, the SEC announced its enforcement action against U.S. crypto exchange Coinbase on Thursday, signaling an intent to revamp and intensify regulatory measures within the industry.

As the Trump administration appears to relax standards around corruption in various areas, critics from across the political spectrum caution that the trend is alarming. Since returning to office just over a month ago, President Trump has suspended investigations into corporate foreign bribery and dismissed officials from numerous federal agencies. A recent investigation into New York Mayor Eric Adams involving alleged bribery from foreign nationals has prompted further scrutiny of the administration.

Trump’s views on cryptocurrency have shifted dramatically from past dismissals of it as a scam. This newfound support presents a mixed landscape for the sector. Advocates of cryptocurrencies are encouraged by the positive shift, yet skeptical of Trump’s participation given his controversial ventures, such as his endorsement of a memecoin and the pardon of Ross Ulbricht, founder of the Silk Road dark web marketplace.

Inside the cryptocurrency community, Justin Sun remains a divided figure. Moderator Gareth Rhodes of Pacific Street noted, “While some regard him as a visionary, others label him an opportunist, with both sides acknowledging his significant influence in the crypto sphere.” Eric Soufer, a political advisor to key crypto firms, remarked that Sun’s association with Trump Coin might complicate perceptions moving forward, stating, “We need to see what the actual settlement looks like before we can judge just how much politics may have played a role.”

The SEC and Sun’s legal team have proposed submitting a status report within 60 days to clarify the future of the case, including any possible settlements.