Ongoing Lawsuits against Controversial ICO Companies

Initial coin offering (ICO) enforcement has reshaped crypto since 2017. Below is a concise, factual status check on the most consequential cases—what’s still active in 2025, what recently wrapped, and the practical takeaways for founders and investors. Citations appear after each relevant section so you can verify details quickly.

What’s still active in 2025
Justin Sun / Tron (SEC v. Sun et al.)
The SEC’s civil case over alleged unregistered offers (TRX/BTT), wash trading, and paid celebrity promotions remains in play, but the parties jointly asked the court to pause proceedings to explore a resolution (filed Feb 26, 2025). A stay was sought for 60 days, signaling active settlement talks rather than a trial posture.

Regulators themselves summarized the development this spring, noting the joint motion to stay while discussing potential resolution. Expect updates on whether the case settles, proceeds, or is otherwise disposed.

EOS / Block.one (investor class action)
Separate from the SEC’s 2019 penalty against Block.one, a U.S. investor class action has lingered. A revised $22M settlement has faced prolonged approval delays, with Reuters reporting the court’s final approval remained unresolved as of May 2024. If you participated in the EOS token sale, keep an eye on the settlement website for any status change.

Recently concluded or materially changed (2024–2025)
Ripple (XRP)
In 2024, the court entered a final judgment: programmatic XRP sales on exchanges did not violate securities laws, while certain institutional sales did; the court imposed a ~$125M civil penalty and an injunction tied to institutional transactions. In June 2025, the judge rejected a proposed path to reduce the penalty and lift the injunction. In August 2025, both sides dismissed their appeals—ending the case with the $125M penalty and injunction intact.

Dragonchain
The SEC dismissed its civil enforcement action with prejudice in April 2025, citing agency discretion and noting the dismissal did not signal a broader position on other matters.

Earlier landmark ICO outcomes (context, no longer ongoing)
Telegram (TON)
Telegram agreed in 2020 to return more than $1.2B to investors and pay an $18.5M penalty to resolve the SEC’s case over its unregistered Gram token offering.

Kik (Kin)
A 2020 summary-judgment win for the SEC led to a final judgment requiring Kik to pay a $5M civil penalty and comply with injunctive relief.

LBRY (LBC)
After the SEC prevailed on summary judgment in 2022, the court ordered a permanent injunction and civil penalty in 2023; LBRY later shuttered operations.

Tezos (XTZ)
Investors reached a $25M settlement, with final approval entered in 2020; claims administration followed.

What these cases mean for founders and investors
The “how” of token sales matters
Ripple underscored that context and transaction type drive legal analysis: the court distinguished programmatic exchange sales from certain institutional sales. Issuers must assess offer/­sale mechanics—not just the asset label—against Howey.

Injunction risk is real
Beyond monetary penalties, injunctions can restrict future institutional sales or require notice to the SEC—constraints that shape business models long after a case ends.

Cross-border structures don’t guarantee safety
Telegram’s outcome shows that sophisticated offshore contracting and staged “private” rounds can still be deemed an unregistered securities scheme when viewed holistically.

Parallel exposure: SEC + private litigation
Block.one demonstrates that even after an SEC settlement, investor class actions can persist for years. Budget both regulatory and civil litigation risk.

Enforcement posture can shift—but facts rule
The SEC’s 2025 materials reference case-specific stays and dismissals as matters of enforcement discretion, not blanket policy changes. Founders should not assume wholesale leniency.

Practical checklist for 2025 token projects
Map every sale route (SAFTs, OTC, exchange liquidity, market-making) and test Howey/“investment contract” exposure before launch.
If any U.S. touchpoints exist, plan for registration or exemption; ensure accredited-investor checks and resale restrictions are enforced.
Avoid hype cycles that look like “efforts of others” driving profit expectations; document utility and delivery milestones.
Disclose compensation for influencers/endorsers; avoid undisclosed promotion risk.
Maintain audit-ready records of marketing, allocations, lockups, and treasury movements.
If already under investigation, engage settlement options early; weigh the long-tail cost of injunctions versus cash penalties.

FAQ
Is Ripple “over” now?
Yes. As of August 2025, appeals were dropped and the district court’s $125M penalty and institutional-sale injunction remain in place.

Is the Tron/Justin Sun case still active?
Yes—procedurally paused to explore resolution as of late February 2025. Watch the docket for whether the stay converts into a settlement or resumes as litigation.

What about older ICOs like Telegram and Kik?
Both resolved in 2020 with penalties and injunctive relief, and they continue to inform how courts and the SEC analyze token offerings.