• The Securities and Exchange Commission (SEC) has filed a lawsuit against Justin Sun, the Tron Foundation, the BitTorrent Foundation and Rainberry for offering unregistered securities.
• The SEC alleges that Sun orchestrated manipulative trading of TRX and BTT tokens.
• The SEC also claims that celebrities such as Lindsay Lohan, Jake Paul and Akon were involved in promoting TRX and BTT without disclosing they had been paid for it.
SEC Sues Justin Sun Over Crypto Securities Offerings
The United States Securities and Exchange Commission (SEC) has called for a jury trial against Tron founder Justin Sun for what they allege is the “orchestration of the unregistered offer and sale, manipulative trading, and unlawful touting of crypto asset securities.” In a March 22 filing in U.S. District Court for the Southern District of New York, SEC named Sun, the Tron Foundation, BitTorrent Foundation and Rainberry over their offer and sale of Tron (TRX) and BitTorrent (BTT), alleging that these tokens were securities.
Celebrities Promoting TRX & BTT Without Disclosing Payments
The SEC further alleged that Sun engaged in “manipulative wash trading” by enlisting help from celebrities to drive public interest in both tokens. These celebrities included American rapper Soulja Boy; Austin Mahone; actress Lindsay Lohan; YouTuber Jake Paul; singer Aliaune Thiam (also known as Akon). Akon was also behind projects to create a “crypto city” in Senegal & Uganda. According to the SEC complaint, although the celebrities were paid to promote TRX & BTT on social media platforms no disclosure was made regarding how much they had been paid or that they had been paid at all leading people to believe these celebrities had an unbiased interest in these cryptocurrencies when this was not actually true.
Allegations Of Unregistered Offers & Sales Of Crypto Assets
The financial regulator alleged that Sun’s actions violated aspects of the Securities Act given his involvement with the offer & sale of TRX & BTT were unregistered. Furthermore according to their complaint Sun conducted more than 600K wash trades from April 2018 – February 2019 worth $31 million USD worth in TRX token sales alone during this period
Quotes From Gurbir Grewal On Investor Protection
Gurbir Grewal who is director of enforcement at SEC commented on investor protection stating: “Although we’re neutral about technologies at issue we’re anything but neutral when it comes to investor protection” He went on to state: “As alleged in our complaint Justin Sunny his wholly-owned companies failed to register their ongoing offers & sales of billions dollars worth digital asset securities which deprived potential investors critical information needed make informed investment decisions.”