Many Top Celebs Listed in SEC Filing Against Tron Founder Justin Sun

Photo by CHUTTERSNAP on Unsplash

The United States SEC has leveled allegations of cryptocurrency violations against Justin Sun, the founder of Tron.

The allegations (1) include selling and airdropping unregistered securities.

In addition to these allegations, the financial regulator disclosed that the Chinese-born Grenadian crypto entrepreneur is being investigated for fraud and market manipulation.


Justin Sun is accused of engaging in market manipulation by the SEC

For the same two tokens, the SEC has filed a lawsuit against Justin Sun, the BitTorrent Foundation, the Tron Foundation, and BitTorrent, which is now known as Rainberry.

Tron (TRX) and BitTorrent are unregistered crypto asset securities, according to the watchdog organization for the financial sector (BTT).

According to the explanation provided by the Commission, the defendants engaged in fraudulent activity by manipulating the secondary market for TRX by using an “extensive wash trading” scheme.

Per SEC, Justin Sun faked active trading in order to manipulate the trading activity of TRX and BTT.

With the alleged use of a wash trading strategy, the businessman made an attempt to boost the volume of TRX’s trade artificially.

In its complaint with the court, the SEC provided information indicating that Justin Sun directed his employees to engage in more than 600,000 wash trades involving the TRX coin.

In addition, the governing body stated that the daily volume of TRX traded via these wash trades ranged anywhere from 4.5 million to 7.4 million.

This project required a substantial supply of TRX, which Sun is said to have delivered. According to the allegations, Sun also decided to sell TRX into the secondary market, resulting in proceeds of $31 million from illegal and unregistered sales and offers of the token, as stated by the SEC.

According to the federal authorities, the founder of Tron was the one who was responsible for making the transactions between the two brokerage firms that he controlled.

During the time that the trades were purportedly being conducted by employees of the Tron Foundation, members of the Tron Foundation and BitTorrent controlled the accounts of the trading platform, and members of the Rainberry staff moved monies related to the activities.



A List of Celebrities Linked to Sun’s Accusations

Gary Gensler, the chair of the US SEC, remarked that the case highlights the significant dangers that investors are exposed to in the absence of adequate disclosure prior to the issuing of crypto asset securities.

In addition, claims have been made against famous supporters of Tronix and BitTorrent.

Among them are the likes of Jake Paul, Austin Mahone, Soulja Boy, and Ne-Yo, as well as the American actress Lindsay Lohan. Other musicians involved include Kendra Lust, Lil Yachty, and the well-known musician Akon.

According to the legal filing, the Sun paid the celebrities, and the publication was aware that the celebrities failed to disclose the payment.

Gurbir Grewal, who is in charge of enforcement for the SEC, stated that Justin Sun hired social media influencers to push the unregistered offerings. Moreover, Gensler offered his thoughts on “organized wash trading,” stating that:

β€œAccording to the allegations, Sun and his companies not only targeted US investors in their unregistered offers and sales, which resulted in millions of dollars in proceeds of crime at the cost of investors, but they additionally organized wash trading on an unregistered trading system in order to create the misleading looks of active trading in TRX.”

By structuring a promotional campaign for TRX and BTT where he and his celeb promoters obscured the fact that the celebrities were paid for their tweets, Sun was able to persuade investors further to purchase the cryptocurrencies.

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