(Bloomberg) -- Lawyers for Justin Sun and for the US Securities and Exchange Commission are seeking a stay in the regulatory proceedings against the crypto entrepreneur.
According to the Wednesday filing, “the Parties submit that it is in each of their interests to stay this matter while they consider a potential resolution and agree that no party or non-party would be prejudiced by a stay.”
The request, which follows a similar pause in the case against Binance Holdings Ltd., is the latest example of a dramatic shift in the regulatory climate for digital assets in the US since the inauguration of President Donald Trump, who campaigned in a part on a promise to make the US “the crypto capital of the planet.”
Both Sun and the regulator declined to comment.
Under acting chair Mark Uyeda, the SEC has closed its investigation into the crypto operations at Robinhood Markets Inc.; ended a probe into Uniswap, the decentralized finance firm; and another into nonfungible-token marketplace OpenSea. Most significantly, Coinbase Global Inc. said the regulator had agreed to drop its lawsuit against the largest digital-asset exchange in the US pending commissioner approval.
The day after Trump’s inauguration, Uyeda announced the formation of a crypto-focused task force, separate from its enforcement division, to create a “comprehensive and clear” framework to regulate the market. He called the initiative “Crypto 2.0.”
By contrast, under former Chair Gary Gensler the SEC brought dozens of penalties and lawsuits against crypto companies. Various crypto executives publicly celebrated his resignation in January.
Gensler’s SEC sued Sun in 2023, alleging at the time that he worked with companies he owns and controls – the Tron Foundation, BitTorrent Foundation Ltd., and Rainberry Inc. — to engineer the offer and sale of unregistered securities.
Sun has invested $75 million in one of Trump’s crypto projects, World Liberty Financial. Per the terms of the project, 75% of the proceeds of token sales are sent to the Trumps as a fee—or around $56 million.
“The fact that they’re not even pursuing fraud charges anymore, especially with someone like Justin Sun, demonstrates that the politicization of the agency is already paying off for Trump’s business associates,” says Corey Frayer, director of investor protection at the Consumer Federation of America, and until recently senior adviser to Gary Gensler on crypto issues.
Sun attracted significant attention in the art world when he bought a sculpture by the artist Maurizio Cattelan — made of a piece of duct tape and a banana stuck to a wall — for $6.2 million. Last week, he courted adoring crowds in Hong Kong during the Consensus crypto conference, where he participated on a panel with Zak Folkman, a co-founder of the Trump crypto project.
“Everything has changed dramatically since last year,” Sun said during the panel.
--With assistance from Teresa Xie and Nicola M White.
(Updates throughout with context on the SEC under Trump and background on Justin Sun.)
