On Wednesday, the US Securities and Exchange Commission (SEC) accused Tron founder Justin Sun of violating securities laws, manipulating the market, and offering investors unregistered securities.
In addition, the Commission sued Sun’s companies Tron Foundation, Rainberry, and BitTorrent. According to the lawsuit, Sun and his firms manipulated Tronix and BitTorrent tokens on the secondary market. The SEC also claimed that the two cryptocurrencies are unregistered securities.
The agency explained that Sun was involved in market manipulation back in 2019 after he instructed his employees to execute over 650,000 Tronix wash trades between his two crypto exchanges. The SEC claimed that the Tron founder made illegal gains of $31 million from the trades.
Following the lawsuit announcement, Tronix shed 10% within thirty minutes to trade at $0.058. However, the token is now settling at $0.062. According to CoinGecko, Tronix is currently the seventeenth largest crypto by market cap. The BitTorrent token has also posted a drop of 1.4% in the past 24 hours to trade at $0.000000622113 as of this writing.
SEC Charges Various Celebrities for Promoting Sun’s Tokens
Besides Sun, the SEC also charged several celebrities who did not disclose they were paid to market BitTorrent and Tronix tokens. These celebrities include actress Lindsay Lohan, social media influencer Jake Paul, musicians Shaffer Smith (Neyo), DeAndre Way (Soulja Boy), Aliaune Thiam (Akon), and Miles McCollum (Lil Yachty).
The regulator revealed that each celebrity had agreed to pay $400,000 or more to settle the charges.
Last October, the SEC took similar action against boxer Floyd Mayweather and reality TV superstar Kim Kardashian for their involvement in promoting EthereumMax. Mayweather challenged the charges, while Kardashian pledged to pay a $1.2 million penalty fee to settle with the regulator.
SEC Chairman Warns Celebrities
At the time, SEC Chairman Gary Gensler took to Twitter to warn celebrities to stop promoting crypto projects without disclosing their financial agreements.
Gensler said the SEC will continue going after every celebrity not adhering to the regulator’s policies in an effort to protect investors.
Meanwhile, the agency’s Director of Enforcement, Gurbir Grewal, has alleged that Sun told the accused celebrities not to reveal they were getting paid to promote his tokens.
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