SEC Files Proposed Settlement with Rainberry for Wash Trading Claims

SEC Litigation Releases

Filed March 5th, 2026

Detected March 6th, 2026

Summary

The SEC has filed a proposed settlement with Rainberry, Inc. for wash trading claims, requiring a $10 million civil penalty. This settlement, if approved by the court, would resolve the SEC's claims against Rainberry related to wash trading and dismiss all remaining claims against Rainberry and other defendants, including Justin Sun and associated foundations.

View original document View source feed page

What changed

The Securities and Exchange Commission (SEC) has filed a proposed final judgment to settle claims against Rainberry, Inc. for wash trading violations, as part of a broader resolution involving Justin Sun and associated foundations. The settlement, filed in the U.S. District Court for the Southern District of New York, requires Rainberry to pay a $10 million civil penalty and be permanently enjoined from violating Section 17(a)(3) of the Securities Act of 1933. If approved, this judgment would dismiss the SEC's remaining claims against Rainberry and all claims against the other Tron Defendants. The SEC's original complaint alleged that Rainberry facilitated wash trading in 2018-2019 to artificially inflate the trading volume of the crypto asset "TRX."

This action represents a significant enforcement outcome for wash trading in the digital asset space. Regulated entities, particularly those involved in cryptocurrency trading or market making, should review their practices to ensure compliance with anti-manipulation provisions. While this settlement resolves claims against Rainberry, the SEC also voluntarily dismissed its claims against DeAndre Cortez Way. The court's approval is pending, and the settlement does not involve an admission of guilt from the defendants regarding the settled claims.

What to do next

Review wash trading policies and procedures
Assess compliance with Section 17(a)(3) of the Securities Act of 1933
Consult legal counsel regarding digital asset market manipulation risks

Penalties

Civil penalty of $10 million

Source document (simplified)

Justin Sun, Tron Foundation Limited, BitTorrent Foundation Ltd., Rainberry, Inc., and DeAndre Cortez Way

U.S. SECURITIES AND EXCHANGE COMMISSION

Litigation Release No. 26496 / March 5, 2026

Securities and Exchange Commission v. Justin Sun, et al., No. 1:23-cv-02433 (S.D.N.Y. filed Mar. 22, 2023)

SEC Files Proposed Settlement with Respect to Wash Trading Claims Against Rainberry, Inc.; Dismisses All Remaining Claims

Today, as part of a global resolution, the SEC filed a proposed final judgment in the U.S. District Court for the Southern District of New York as to the Commission’s claims against Rainberry, Inc., Justin Sun, Tron Foundation Limited, and BitTorrent Foundation Ltd. (the “Tron Defendants”). If approved by the court, the proposed final judgment would settle the Commission’s claim against Rainberry related to wash trading in violation of Section 17(a)(3) of the Securities Act of 1933, and dismiss, with prejudice, the Commission’s remaining claims against Rainberry and all claims against the other Tron Defendants.

The SEC’s complaint, filed in March 2023 and amended in April 2024, alleged that in 2018 and 2019, Rainberry facilitated wash trading to artificially inflate the trading volume of the crypto asset “TRX.” As described in the amended complaint, wash trading generally refers to trades that occur without a change in beneficial ownership, creating the false perception of market activity that does not reflect the true supply and demand for the securities.

Without admitting or denying the Commission’s allegations as to Rainberry with respect to the settled claim, the Tron Defendants consented to the entry of a final judgment, subject to court approval, that would permanently enjoin Rainberry from violating Section 17(a)(3) of the Securities Act and order Rainberry to pay a civil penalty in the amount of $10 million.

The Commission also filed a notice of voluntary dismissal as to the pending claim for violations of Section 17(b) of the Securities Act against DeAndre Cortez Way. As stated in the notice of dismissal, “[t]he SEC’s decision to seek dismissal of this enforcement action is an exercise of its discretion and does not necessarily reflect the SEC’s position on any other case.”