The U.S. Securities and Exchange Commission (SEC) has taken action to issue a complaint against Tron founder Justin Sun and the Tron Foundation for offering unregistered securities and market manipulation. In addition, a group of influencers were charged by the organization with promoting Tron without disclosing that they were being paid for their support.
Tron founder Justin Sun charged with selling unregistered securities and market manipulation
The U.S. SEC today announced a series of charges against Justin Sun, founder of Tron, and the Tron Foundation, affirming that the foundation providedTRXas an unregistered security, in violation of securities laws; in 2018, Sun acquired Bittorrent Inc. (BTT), which was launched after Sun acquired Bittorrent Inc. in 2018, was also mentioned as being part of these offerings. In the complaint filed, the SEC stated,:
all. purchasers of TRX, including those who bid the value ofTRXother than cash and crypto assets, invested in a common enterprise with Sun and the Tron Foundation, and always held significantholdings of TRX.
The statement makes similar allegations regarding BTT, stating that it was “offered and sold as a security and specifically as an investment contract.”
The SEC also declares that Justin Sun orchestrated a scheme to manipulate the price ofTRON (TRX)on crypto exchanges using different accounts involved in daily laundering trading activities and charged some of his team with moving significant amounts ofTRXthrough different exchanges; according to the SEC’s complaint, one of the accounts involved belonged to Sun’s father.
The scheme took advantage of between 4.5 million and 7.4 million people; TRXwas allegedly laundered and traded in over 600,000 operations daily.
Celebrities are also charged with illegal promotion of Tron and Bittorrent Token
As part of the U.S. SEC action, a series of influencers and celebrities were also charged with promoting these securities without disclosing that they were being paid; the SEC alleges that Sun used these celebrities as messengers, using their employees as messengers and disclosing that they were part of the campaign It alleges that Sun indirectly instructed them not to.
The celebrities targeted 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 Yakuti), Shaffer Smith (AKA Ne-Yo), and Ariaun Sham (AKA Akon). All but Cortez Way and Mahone have already settled with regulators and paid more than $400,000 in “regrets, interest, and fines.”
SEC Chairman Gary Gensler said,:
This case once again illustrates the high level of risk investors face when crypto asset securities are offered and sold without proper disclosure.”
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