The US Securities and Exchange Commission (SEC) took action against Justin Sun, the founder of Tron, and the Tron Foundation, issuing charges for offering unregistered securities and market manipulation. Additionally, the organization charged a group of influencers for promoting tron without disclosing that they were being compensated for their endorsements.
Tron founder Justin Sun accused of selling unregistered securities and manipulating the market
The US SEC today announced a series of charges against Tron founder Justin Sun and the Tron Foundation, stating that the foundation offered TRX as an unregistered security, in violation of securities laws. The Bittorrent (BTT) token, which was launched after Sun took over Bittorrent Inc. in 2018, was also mentioned as part of these deals. In the complaint filed, the SEC state:
All TRX buyers, including those who offered value for TRX other than cash or crypto assets, invested in a joint venture with Sun and the Tron Foundation, which at all times retained a significant amount TRX holdings.
The statement makes similar allegations regarding BTT, stating that it “was offered and sold as a security, specifically as an investment contract.”
The SEC also states that Justin Sun orchestrated a scheme to manipulate the price of tron (TRX) on crypto exchanges using different accounts involved in daily laundering trading activities, assigning part of your team the task of moving significant amounts of TRX through different exchanges. One of the accounts involved, according to the SEC complaint, belonged to Sun’s father.
Through this scheme, between 4.5 million and 7.4 million TRX they were allegedly traded daily, in more than 600,000 trades.
Celebrities Also Indicted For Illegal Promotion Of Tron And Bittorrent Token
As part of the US SEC action, a number of influencers and celebrities were also indicted for promoting these securities without disclosing that they were paid to do so. The SEC claims that Sun indirectly instructed these celebrities not to reveal that they were part of a campaign, using the employees as messengers.
Celebrities named in the lawsuit include Lindsay Lohan, Jake Paul, DeAndre Cortez Way (aka Soulja Boy), Austin Mahone, Michele Mason (aka Kendra Lust), Miles Parks McCollum (aka Lil Yachty), Shaffer Smith (aka Ne-Yo) and Aliaune Thiam (aka Akon). All of them except Cortez Way and Mahone have already settled with the regulator, paying more than $400,000 in “refund, interest and penalties.”
SEC Chairman Gary Gensler fixed:
This case again demonstrates the high risk investors face when crypto asset securities are offered and sold without proper disclosure.”
What do you think of the legal actions that the US SEC is taking against Justin Sun and the Tron Foundation? Tell us what you think in the comments section below.
image credits: Shutterstock, Pixabay, Wiki Commons
Disclaimer: This article is for informational purposes only. It is not a direct offer or a solicitation of an offer to buy or sell, or a recommendation or endorsement of any product, service or company. bitcoin.com does not provide investment, tax, legal or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.