Sun speaks before eating a conceptual artwork—a banana stuck to a wall with duct tape, for which he had paid $6.2 million, in Hong Kong, November 29, 2024.Peter Parks/AFP via Getty Images
This story was originally published on Judd Legum’s Substack, Popular Information, to which you can subscribe here.
In December, Popular Information reported that Chinese crypto entrepreneur Justin Sun purchased $30 million in crypto tokens from World Liberty Financial (WLF), a new venture backed by President Donald Trump and his family. Sun’s purchase resulted in a cash windfall for Trump. On Wednesday, the Securities and Exchange Commission (SEC) and Sun sent a joint letter to a federal judge, asking for a stay of Sun’s case. Today, the judge granted the SEC’s request.
In March 2023, the SEC charged Sun and three of his companies, accusing him of marketing unregistered securities and “fraudulently manipulating the secondary market” for a crypto token. The SEC accused Sun of wash trading, which involves buying and selling a token quickly to fraudulently manufacture artificial interest. Sun was also charged with paying celebrities, including Lindsay Lohan, Jake Paul, and Soulja Boy, for endorsing his crypto “without disclosing their compensation,” which violates federal law.
A few weeks after Trump won the 2024 presidential election, Sun publicly announced that he had become WLF’s largest investor, buying $30 million of its tokens. Sun added that his company, TRON, was “committed to making America great again.”
Sun’s purchase put millions in Trump’s pocket. WLF was entitled to “$30 million of initial net protocol revenue” in a reserve “to cover operating expenses, indemnities, and obligations.” After the reserve was met, a company owned by Trump would receive “75% of the net protocol revenues.” Sun’s purchase covered the entire reserve. As of December 1, this amounted to $18 million for Trump—75 percent of the revenues of all other tokens sold at the time. Sun also joined WLF as an advisor. While the purchase benefited Trump, WLF tokens are essentially worthless for Sun, as they are non-transferable and locked indefinitely.
Nevertheless, Sun has since invested another $45 million in WLF, bringing his total investment to $75 million. This means Sun’s purchases have sent more than $50 million to Trump, Bloomberg reported. Sun has also continued to shower Trump with praise. On January 22, Sun posted on X, “if I have made any money in cryptocurrency, all credit goes to President Trump.”
Now, the SEC seems poised to negotiate a favorable settlement with Sun or drop the case entirely. Yesterday, the SEC and Sun filed a joint request for a 60-day stay in the case against Sun to “allow the Parties to explore a potential resolution.” Sun seems pleased. He responded to news of the request for a stay on X, posting three handshake emojis.
Last week, Brian Armstrong, CEO of the crypto trading platform Coinbase, announced that the SEC was dismissing its lawsuit against the company. The move came after Coinbase boosted Trump’s crypto meme coin, donated $75 million to a pro-Trump Super PAC, and chipped in $1 million to Trump’s inauguration celebration.
