Verify a decision

{"actor":"system:backfill","investigation_id":"ddc1afee-2423-49f7-bee7-0f9cee732ccc","kind":"publish","page_slug":"rainberry-inc","published_at":"2026-08-15T17:04:14.664Z","sequence_num":1,"snapshot":{"content_type":"investigation","entity_name":"Rainberry Inc","sections":[{"content":"Rainberry Inc is the legal corporate entity operating the BitTorrent peer-to-peer file sharing protocol and its associated software products including uTorrent. The company was originally incorporated as BitTorrent, Inc. in 2004 by Bram Cohen and Ashwin Navin, and quietly renamed to Rainberry Inc in 2017. Tron founder Justin Sun acquired the company in June 2018 for a reported $140 million following a disputed acquisition process that included a temporary restraining order Sun obtained to prevent competing bids. Following the acquisition, Rainberry launched the BitTorrent Token (BTT), a TRC-10 utility token on the Tron blockchain, through a January 2019 initial exchange offering on Binance.","heading":"Company Background","severity":"low","sources":[{"credibility":2,"name":"BitTorrent Sells to Blockchain Entrepreneur Justin Sun — Variety","type":"news_article","url":"https://variety.com/2018/digital/news/bittorrent-acquisition-tron-justin-sun-1202841793/"},{"credibility":2,"name":"Tron Founder Justin Sun Acquires BitTorrent after Legal Battle — CCN","type":"news_article","url":"https://www.ccn.com/tron-founder-justin-sun-acquires-bittorrent-after-legal-battle/"}]},{"content":"On March 22, 2023, the SEC filed a complaint in the U.S. District Court for the Southern District of New York (LR-25676) against Justin Sun, Tron Foundation Limited, BitTorrent Foundation Ltd., and Rainberry Inc., alleging three categories of securities law violations. First, the SEC alleged that Sun and his companies offered and sold TRX and BTT as unregistered securities through so-called 'bounty programs' that directed participants to promote tokens on social media in exchange for TRX and BTT distributions. Second, the SEC alleged that from at least April 2018 through February 2019, Sun directed employees to conduct more than 600,000 wash trades of TRX between two accounts he controlled, with between 4.5 million and 7.4 million TRX wash traded daily, creating the false appearance of an active trading market. Third, the SEC alleged that Sun and his companies orchestrated a paid celebrity promotion campaign in which celebrities including Lindsay Lohan, Jake Paul, Soulja Boy (DeAndre Cortez Way), Austin Mahone, Kendra Lust, Lil Yachty, Ne-Yo, and Akon promoted TRX and BTT on social media without disclosing that they were compensated. These are allegations from the SEC complaint; no court has adjudicated the underlying facts.","heading":"SEC Enforcement Action — March 2023 Complaint","severity":"critical","sources":[{"credibility":1,"name":"SEC Press Release: SEC Charges Crypto Entrepreneur Justin Sun and His Companies for Fraud and Other Securities Law Violations","type":"regulatory","url":"https://www.sec.gov/newsroom/press-releases/2023-59"},{"credibility":1,"name":"SEC Litigation Release LR-25676 — Justin Sun et al.","type":"regulatory","url":"https://www.sec.gov/enforcement-litigation/litigation-releases/lr-25676"},{"credibility":2,"name":"SEC charges Tron's Justin Sun and celebrities including Lindsay Lohan, Jake Paul — The Block","type":"news_article","url":"https://www.theblock.co/post/222077/sec-charges-trons-justin-sun-and-celebrities-including-lindsay-lohan-jake-paul"},{"credibility":1,"name":"SEC charges Tron founder Justin Sun, celebrities Lindsay Lohan, Jake Paul with crypto violations — CNBC","type":"news_article","url":"https://www.cnbc.com/2023/03/22/sec-hits-jake-paul-lindsey-lohan-justin-sun-with-crypto-violations.html"}]},{"content":"On March 5, 2026, the SEC filed a proposed final judgment (LR-26496) in the Southern District of New York that would resolve the outstanding claims against all defendants. Under the proposed terms, Rainberry Inc agreed to pay a $10 million civil penalty and consented to a permanent injunction barring future violations of Section 17(a)(3) of the Securities Act of 1933, which prohibits engaging in transactions or practices that operate as a fraud or deceit in securities offerings. All remaining claims against Rainberry, Justin Sun, Tron Foundation Limited, and BitTorrent Foundation Ltd. would be dismissed with prejudice. The settlement was entered without any admission or denial of the allegations by any defendant. The proposed final judgment remained subject to approval by a federal judge as of the date of filing. The settlement represents a partial financial resolution; the $10 million penalty falls on Rainberry as a corporate entity rather than on Justin Sun personally, who faced no individual financial penalty under the proposed terms.","heading":"SEC Settlement — March 2026","severity":"high","sources":[{"credibility":1,"name":"SEC Litigation Release LR-26496 — Justin Sun, Tron Foundation Limited, BitTorrent Foundation Ltd., Rainberry, Inc., and DeAndre Cortez Way","type":"regulatory","url":"https://www.sec.gov/enforcement-litigation/litigation-releases/lr-26496"},{"credibility":2,"name":"SEC dismisses claims against Justin Sun and Tron Foundation, BitTorrent developer Rainberry agrees to pay $10M fine — The Block","type":"news_article","url":"https://www.theblock.co/post/392509/sec-dismisses-claims-against-justin-sun-and-tron-foundation-bittorrent-developer-rainberry-agrees-to-pay-10m-fine"},{"credibility":2,"name":"Tron's Rainberry to pay $10 million to settle SEC, Justin Sun lawsuit — CoinDesk","type":"news_article","url":"https://www.coindesk.com/policy/2026/03/05/sec-justin-sun-reach-settlement-over-tron-lawsuit"},{"credibility":2,"name":"SEC Moves to Settle Justin Sun Case With $10M Penalty for BitTorrent Owner — Decrypt","type":"news_article","url":"https://decrypt.co/360201/sec-settle-justin-sun-case-10m-penalty-bittorrent-owner"},{"credibility":1,"name":"SEC Ends Case Against Crypto Billionaire Justin Sun — Bloomberg","type":"news_article","url":"https://www.bloomberg.com/news/articles/2026-03-05/sec-ends-case-against-crypto-billionaire-justin-sun"}]},{"content":"The SEC's 2023 complaint identified eight celebrities who were allegedly paid to promote TRX and BTT without disclosing their compensation, in alleged violation of the anti-touting provisions of the federal securities laws. Six of the eight celebrity defendants — Lindsay Lohan, Jake Paul, Ne-Yo, Lil Yachty, Kendra Lust, and Akon — reached earlier settlements with the SEC, paying approximately $400,000 each in combined disgorgement, interest, and penalties, without admitting or denying the SEC's findings. DeAndre Cortez Way (Soulja Boy) and Austin Mahone remained defendants alongside Rainberry and Tron entities through the March 2026 proposed resolution. The SEC's proposed final judgment also addressed the remaining claims against Cortez Way and Mahone.","heading":"Celebrity Promotion Scheme — Co-defendants and Parallel Settlements","severity":"high","sources":[{"credibility":1,"name":"SEC charges Tron founder Justin Sun, celebrities with crypto violations — CNBC","type":"news_article","url":"https://www.cnbc.com/2023/03/22/sec-hits-jake-paul-lindsey-lohan-justin-sun-with-crypto-violations.html"},{"credibility":1,"name":"SEC Litigation Release LR-25803 — Justin Sun, Tron Foundation, BitTorrent Foundation, Rainberry, Austin Mahone, DeAndre Cortez Way","type":"regulatory","url":"https://www.sec.gov/enforcement-litigation/litigation-releases/lr-25803"},{"credibility":1,"name":"Jake Paul and Lindsay Lohan among celebrities charged by SEC over crypto promotions — NBC News","type":"news_article","url":"https://www.nbcnews.com/pop-culture/sec-crypto-charges-celebrities-rcna76212"}]},{"content":"Separately from the SEC matter, Rainberry Inc has faced civil allegations related to copyright infringement. In January 2020, former Rainberry employees Richard Hall and Lukasz Juraszek filed a lawsuit in California federal court alleging that Justin Sun directed illegal downloading and seeding of copyrighted Hollywood films, purportedly to generate traffic and advertising revenue, and that they were terminated after refusing to participate. A related class-action suit was reportedly filed in 2025 asserting that Rainberry's BitTorrent File System (BTFS) infrastructure — which rewards users with BTT tokens for storing and distributing content — could facilitate distribution of copyright-infringing material. These are civil allegations; no court has issued a judgment on the merits of these claims.","heading":"Copyright Infringement Allegations","severity":"medium","sources":[{"credibility":2,"name":"BitTorrent Owner Accused of Profiting From Movie Piracy — TorrentFreak","type":"news_article","url":"https://torrentfreak.com/bittorrent-owner-accused-of-profiting-from-movie-piracy-200128/"},{"credibility":2,"name":"BitTorrent Owner Rainberry Inc Faces Lawsuit For Allegedly Profiting From Movie Piracy — Tech Business News","type":"news_article","url":"https://www.techbusinessnews.com.au/news/bittorrent-owner-rainberry-inc-faces-lawsuit-for-allegedly-profiting-from-movie-piracy/"}]},{"content":"BTT was launched in January 2019 as a TRC-10 token on the Tron blockchain, distributed through a Binance Launchpad sale. The SEC's 2023 complaint alleged that BTT was offered and sold as an unregistered security through monthly airdrops to TRX holders. BTT experienced extreme price volatility following its launch high and suffered a sharp price decline during the broader 2022 crypto market downturn. The SEC alleged that wash trading of TRX — not BTT directly — was the primary market manipulation mechanism, though BTT's promotion without required disclosures formed part of the celebrity endorsement count. Critics have also noted that the utility case for BTT is debated, given that the BitTorrent protocol operated at scale without a native token prior to the Tron acquisition.","heading":"BitTorrent Token (BTT) — Token and Market Context","severity":"medium","sources":[{"credibility":3,"name":"The Truth About the Most Illegal Cryptocurrency: BitTorrent (BTT) — 99Bitcoins","type":"news_article","url":"https://99bitcoins.com/news/the-truth-about-the-most-illegal-cryptocurrency-bittorent-btt/"},{"credibility":3,"name":"Is The BitTorrent Token (BTT) About To Start A Bull Run? — Disruption Banking","type":"news_article","url":"https://www.disruptionbanking.com/2024/08/28/is-the-bittorrent-token-btt-about-to-start-a-bull-run/"}]}],"sources_used":[{"credibility":1,"name":"SEC Press Release 2023-59: SEC Charges Crypto Entrepreneur Justin Sun and His Companies for Fraud and Other Securities Law Violations","type":"regulatory","url":"https://www.sec.gov/newsroom/press-releases/2023-59"},{"credibility":1,"name":"SEC Litigation Release LR-25676 — Justin Sun et al.","type":"regulatory","url":"https://www.sec.gov/enforcement-litigation/litigation-releases/lr-25676"},{"credibility":1,"name":"SEC Litigation Release LR-25803 — Justin Sun, Tron Foundation, BitTorrent Foundation, Rainberry, Austin Mahone, DeAndre Cortez Way","type":"regulatory","url":"https://www.sec.gov/enforcement-litigation/litigation-releases/lr-25803"},{"credibility":1,"name":"SEC Litigation Release LR-26496 — Justin Sun, Tron Foundation, BitTorrent Foundation, Rainberry, DeAndre Cortez Way (2026 settlement)","type":"regulatory","url":"https://www.sec.gov/enforcement-litigation/litigation-releases/lr-26496"},{"credibility":1,"name":"SEC Ends Case Against Crypto Billionaire Justin Sun — Bloomberg","type":"news_article","url":"https://www.bloomberg.com/news/articles/2026-03-05/sec-ends-case-against-crypto-billionaire-justin-sun"},{"credibility":1,"name":"SEC charges Tron founder Justin Sun, celebrities Lindsay Lohan, Jake Paul with crypto violations — CNBC","type":"news_article","url":"https://www.cnbc.com/2023/03/22/sec-hits-jake-paul-lindsey-lohan-justin-sun-with-crypto-violations.html"},{"credibility":1,"name":"Jake Paul and Lindsay Lohan among celebrities charged by SEC over crypto promotions — NBC News","type":"news_article","url":"https://www.nbcnews.com/pop-culture/sec-crypto-charges-celebrities-rcna76212"},{"credibility":2,"name":"Tron's Rainberry to pay $10 million to settle SEC, Justin Sun lawsuit — CoinDesk","type":"news_article","url":"https://www.coindesk.com/policy/2026/03/05/sec-justin-sun-reach-settlement-over-tron-lawsuit"},{"credibility":2,"name":"SEC Moves to Settle Justin Sun Case With $10M Penalty for BitTorrent Owner — Decrypt","type":"news_article","url":"https://decrypt.co/360201/sec-settle-justin-sun-case-10m-penalty-bittorrent-owner"},{"credibility":2,"name":"SEC dismisses claims against Justin Sun and Tron Foundation, BitTorrent developer Rainberry agrees to pay $10M fine — The Block","type":"news_article","url":"https://www.theblock.co/post/392509/sec-dismisses-claims-against-justin-sun-and-tron-foundation-bittorrent-developer-rainberry-agrees-to-pay-10m-fine"},{"credibility":2,"name":"SEC charges Tron's Justin Sun and celebrities including Lindsay Lohan, Jake Paul — The Block","type":"news_article","url":"https://www.theblock.co/post/222077/sec-charges-trons-justin-sun-and-celebrities-including-lindsay-lohan-jake-paul"},{"credibility":2,"name":"SEC sues Tron founder and celebrities — TechCrunch","type":"news_article","url":"https://techcrunch.com/2023/03/22/sec-sues-tron-founder-and-celebrities-including-lindsay-lohan-jake-paul-and-soulja-boy-for-crypto-securities-violations/"},{"credibility":2,"name":"BitTorrent Owner Accused of Profiting From Movie Piracy — TorrentFreak","type":"news_article","url":"https://torrentfreak.com/bittorrent-owner-accused-of-profiting-from-movie-piracy-200128/"},{"credibility":2,"name":"BitTorrent Sells to Blockchain Entrepreneur Justin Sun — Variety","type":"news_article","url":"https://variety.com/2018/digital/news/bittorrent-acquisition-tron-justin-sun-1202841793/"},{"credibility":2,"name":"Top 5 SEC Enforcement Developments for March 2026 — Morrison Foerster","type":"research","url":"https://www.mofo.com/resources/insights/260421-top-5-sec-enforcement-developments-for-march-2026"},{"credibility":2,"name":"Securities Enforcement Roundup March 2026 — Morgan Lewis","type":"research","url":"https://www.morganlewis.com/pubs/2026/04/securities-enforcement-roundup-march-2026"}],"summary":"Rainberry Inc, formerly BitTorrent Inc and the developer of the BitTorrent protocol and BitTorrent Token (BTT), agreed in March 2026 to pay a $10 million civil penalty to settle SEC allegations that it facilitated wash trading to artificially inflate trading volume for the TRX cryptocurrency in 2018–2019. The settlement, filed as a proposed final judgment in U.S. District Court for the Southern District of New York, did not require any admission of wrongdoing. All remaining claims against Rainberry, Justin Sun (Tron founder and controlling owner), Tron Foundation, and BitTorrent Foundation were dismissed with prejudice.","timeline":[{"date":"2004-01-01","event":"BitTorrent, Inc. founded by Bram Cohen and Ashwin Navin.","source":"CCN","source_url":"https://www.ccn.com/tron-founder-justin-sun-acquires-bittorrent-after-legal-battle/"},{"date":"2017-01-01","event":"BitTorrent, Inc. quietly renames itself Rainberry Inc.","source":"Grokipedia","source_url":"https://grokipedia.com/page/Rainberry,_Inc."},{"date":"2018-06-01","event":"Justin Sun acquires Rainberry Inc (BitTorrent) for a reported $140 million following a competitive bidding process.","source":"Variety","source_url":"https://variety.com/2018/digital/news/bittorrent-acquisition-tron-justin-sun-1202841793/"},{"date":"2018-04-01","event":"SEC alleged wash trading of TRX begins, with Sun directing more than 600,000 wash trades through at least February 2019.","source":"SEC LR-25676","source_url":"https://www.sec.gov/enforcement-litigation/litigation-releases/lr-25676"},{"date":"2019-01-28","event":"BitTorrent Token (BTT) launched via Binance Launchpad initial exchange offering.","source":"CoinDesk","source_url":"https://www.coindesk.com/policy/2023/03/22/tron-founder-justin-sun-sued-by-us-sec-on-securities-market-manipulation-charges"},{"date":"2020-01-01","event":"Former Rainberry employees Hall and Juraszek file California federal lawsuit alleging Sun directed illegal downloading of copyrighted films.","source":"TorrentFreak","source_url":"https://torrentfreak.com/bittorrent-owner-accused-of-profiting-from-movie-piracy-200128/"},{"date":"2023-03-22","event":"SEC files complaint (LR-25676) against Justin Sun, Tron Foundation, BitTorrent Foundation, and Rainberry Inc., alleging unregistered securities sales, wash trading, and undisclosed celebrity promotions of TRX and BTT. Eight celebrities including Lindsay Lohan and Jake Paul charged separately.","source":"SEC Press Release 2023-59","source_url":"https://www.sec.gov/newsroom/press-releases/2023-59"},{"date":"2023-01-01","event":"Six celebrity defendants (Lindsay Lohan, Jake Paul, Ne-Yo, Lil Yachty, Kendra Lust, Akon) settle SEC charges, paying approximately $400,000 each without admitting or denying findings.","source":"CNBC","source_url":"https://www.cnbc.com/2023/03/22/sec-hits-jake-paul-lindsey-lohan-justin-sun-with-crypto-violations.html"},{"date":"2026-03-05","event":"SEC files proposed final judgment (LR-26496): Rainberry agrees to pay $10 million civil penalty and accept permanent injunction against Section 17(a)(3) violations. All remaining claims against Justin Sun, Tron Foundation, BitTorrent Foundation, and Rainberry dismissed with prejudice. No admissions of wrongdoing. Subject to federal court approval.","source":"SEC LR-26496","source_url":"https://www.sec.gov/enforcement-litigation/litigation-releases/lr-26496"}]},"v":1}