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According to Bloomberg, lawyers representing Justin Sun and the US Securities and Exchange Commission (SEC) are requesting a stay in the ongoing regulatory proceedings against him.
Justin Sun And SEC Seek Case Pause
This joint filing, submitted on Wednesday, indicates that both parties believe it is in their mutual interest to pause the case while they explore a potential resolution. They assert that such a stay would not prejudice any involved parties or non-parties, marking a collaborative approach to navigating the complexities of crypto regulation.
This follows a similar request for a pause in the case against Binance and reflects a notable shift in the regulatory climate for digital assets in the United States since the inauguration of President Donald Trump.
Under the acting chair Mark Uyeda, the SEC has recently closed investigations into several crypto entities, including Robinhood, the decentralized finance firm Uniswap, and the non-fungible token (NFT) marketplace OpenSea.
Most significantly, Coinbase announced that the SEC agreed to drop its lawsuit against the largest digital asset exchange in the US, pending commissioner approval.
SEC Favoring Trump’s Business Associates?
These actions mark a significant pivot from the previous administration’s approach, which has been criticized by various crypto executives, many of whom celebrated the former SEC Chair Gary Gensler’s resignation in January.
Specifically, the SEC sued Justin Sun in 2023, alleging that he collaborated with entities he controls, such as the Tron Foundation and BitTorrent Foundation, to orchestrate the offer and sale of “unregistered securities.”
However, the recent decision to seek a stay in these proceedings suggests a reevaluation of the agency’s priorities, particularly concerning figures like Justin Sun.
Corey Frayer, director of investor protection at the Consumer Federation of America and a former adviser to Gensler, noted that the absence of fraud charges in the Justin Sun case signifies a “troubling politicization” of the SEC.
The director remarked that the agency’s current approach appears to be “benefitting Trump’s business associates,” suggesting a shift in regulatory focus that aligns with the interests of the former president.
This comes amid significant investments in Trump’s World Liberty Financial (WLFI), with Justin Sun purchasing over $70 million in WLFI token’s to support this upcoming decentralized finance (DeFi) venture.
Featured image from the WSJ, chart from TradingView.com
