Justin Sun, the Crypto Businessman Who Pumped $75 Million into Trump-Backed Token, Finds Himself in a Fortunate Position

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A businessman who has been funneling money into the Trump family-backed crypto token is finding himself in a fortunate position this week as federal securities regulators are hitting pause on their civil fraud case.

On Wednesday, lawyers for the Securities and Exchange Commission and Justin Sun, a 34-year-old Chinese crypto entrepreneur, asked a federal judge to stay the agency’s case, which two years ago sued Sun and his companies — Tron, BitTorrent and Rainberry — for selling unregistered securities and fraudulently manipulating the price of digital token Tronix. Sun and his companies later moved to have the case dismissed.

The pause is a 180 for the SEC, which has been on a tear this year suing several crypto firms and executives. But it comes as the agency faces increasing pressure from Congress to ramp up its efforts to police crypto markets. A bipartisan group of senators on Wednesday slammed the SEC for its "unacceptably slow pace" in approving applications for bitcoin ETFs.

But as the agency prepares to shut down its case against crypto exchange Coinbase in a widely expected move on Thursday, it seems the Trump administration may be pivoting away from crypto enforcement and toward broader administrative matters.

Sun is a polarizing figure within the world of crypto, in which he has become one of the most prominent investors in the World Liberty Financial crypto project, backed by the Trump family. Sun’s $75 million purchase of World Liberty tokens, which he’s touted in social media posts, could set the Trump family up to eventually collect tens of millions of dollars, as the family is entitled to 75% of the tokens’ revenues, according to the company. Sun is also an official adviser to World Liberty, which lists President Donald Trump as its “chief crypto advocate” and his son Barron as its “DeFi visionary.”

World Liberty is just one of several crypto projects the president and his family have set up in recent months, raising concerns about potential corruption. By its nature, crypto offers a particularly easy way to, anonymously or otherwise, funnel money into assets that directly benefit the president and his family.

“Now anyone in world can essentially deposit money into bank account of President of USA with a couple clicks,” tweeted Anthony Scaramucci, former Trump White House communications director, after Trump launched a digital token known as a memecoin last month. “Every favor — geopolitical, corporate or personal — is now on sale, right out in the open.”

The SEC declined to comment. Neither the White House nor Sun responded to a request for comment.

“This is, I guess, going to be the new approach — hands off crypto, not enforcing fraud … and I don’t think it’s going to end well,” Richard Painter, a law professor at the University of Minnesota and an ethics lawyer for the George W. Bush administration, told CNN Business. “The SEC is going to back off — because that’s what the Trump administration wants — on whatever enforcement they are able to do. I think it’s a very worrisome situation.”

Meanwhile, in a widely expected move, the SEC is expected to announce Thursday that it is shutting down its case against US crypto exchange Coinbase, according to a report by the Wall Street Journal. People familiar with the matter told the newspaper that the agency will cite “the Commission’s ongoing efforts to reform and renew its regulatory approach to the crypto industry” for the decision to close the case.

The agency had sued Coinbase in June for allegedly operating as an unregistered exchange and offering unregistered securities to retail investors. The regulator also plans to sue Coinbase CEO Brian Armstrong should the agency decide to pursue executives personally for any alleged wrongdoing.

The move comes after months of speculation that the SEC may drop its case against Coinbase amid pressure from Congress to speed up the agency’s approval of bitcoin ETFs and light up the regulator’s role in policing crypto markets. A bipartisan group of senators on Wednesday slammed the SEC for its “unacceptably slow pace” in approving applications for bitcoin ETFs, adding that the agency has yet to approve a single application despite receiving 15 over the past year.

In their letter to SEC Chair Jay Clayton, senators Elizabeth Warren, Kevin Cramer, Chris Van Hollen and Bill Hagerty also criticized the SEC for its lack of progress in policing crypto markets despite widespread concerns about fraud in the industry.

“The agency has been anything but swift in its response to the burgeoning cryptocurrency market, despite the urgent need for robust investor protection in this rapidly evolving domain and the express mandate from Congress to create a regulatory framework for cryptocurrencies,” the senators wrote. “Given the scope of the issues at hand and the administrative burden on the SEC, we would expect to see more rapid progress by now.”

Compounding conflicts of interest

The Sun case comes as the Trump administration appears to be opening the door to potential corruption beyond crypto.

But critics across the political spectrum say it’s a troubling trend for a president and a White House that is ditching guardrails at an alarming