SEC sues TRON founder Justin Sun over TRX and BTT; celebrity promoters also named

The US Securities and Exchange Commission (SEC) has sued TRON founder and former CEO Justin Sun and his affiliates. March 22.

SEC Highlights Unregistered Sales, Illegal Wash Transactions

The SEC alleges that Sun’s sale of two cryptocurrency tokens, TRON (TRX) and BitTorrent (BTT), constitutes an unregistered securities offering.

The regulator said: attachment Sun and his affiliates conducted a broad public offering of these tokens but did not file registration statements.The regulator also said there were no regulatory exemptions available to the organizers.

The SEC further alleges that Sun and his company engaged in fraud through wash trading. This was intended to create the appearance of real demand and keep the value of the token high. According to the SEC, his three Sun-controlled companies regularly moved tokens between each other without changing their effective ownership.

These parties are believed to have traded between 4.5 and 7.4 million TRX daily from April 2018 to February 2019, and collectively involved in over 600,000 wash trades. Sun also allegedly earned $31 million from the illegal sale of tokens to the secondary market.

The SEC has identified three of Sun’s companies as involved in sales and wash trading schemes. These companies are the Tron Foundation, the BitTorrent Foundation and Rainberry Inc., the latter formerly known as BitTorrent, Inc.

Celebrity endorsements are also a problem

The SEC further alleges that various celebrities promoted BTT and TRX on social media, but failed to disclose that Sun and his company paid them. The question was raised as to whether they were being compensated for their support.

The regulator identified a number of celebrities involved in the promotion, including actress Lindsay Lohan, online influencer and former boxer Jake Paul, adult performer Kenda Lust, music artists Austin Mahone, Lil Yachty, Soulja Boy, Akon and Ne-Yo. Named.

All but two of these celebrities have agreed to settle and pay more than $400,000 in fines and penalties.

Austin Mahone and Soulja Boy did not agree to the settlement and were named as defendants.The two will continue to violate securities law’s non-advertisement provisions “unless bound and barred,” according to the latest SEC documents. That’s what I mean.