SEC files lawsuit against Justin Sun
The U.S. Securities and Exchange Commission (SEC) filed a lawsuit against Tron (TRX) founder Justin Sun on Thursday for offering and selling unregistered securities. He also alleges that he was wash traded.
The SEC also sued eight other celebrities, including Lindsay Lohan, in this connection.
The complaint, filed in the Southern District of New York, alleges that Sun and his company offered and sold both TRX and BTT tokens through multiple “bounty programs.”
According to the complaint, the program would distribute TRX and BTT to promoters, in exchange for promoting the tokens on social media and soliciting them to Tron’s Telegram and Discord channels, Sun’s BitTorrent, etc. was
It also claims that Sun, the BitTorrent Foundation, and Rainberry (a provider of BitTorrent) provided and sold BTT to investors who bought and held TRX on Tron wallets and cryptocurrency exchanges. All of the above cases constitute illegal offerings and sales of unregistered securities.
The SEC also alleges that Sun violated the anti-fraud and market manipulation provisions of the federal securities laws by wash trading in order to apparently increase trading volume in the TRX market.
At least between April 2018 and February 2019, employees were instructed to wash trade TRX between two cryptocurrency trading platform accounts managed by Sun. It claimed that between 4.5 and 7.4 million TRX were wash traded every day.
What is wash trade
Transactions that do not aim to transfer rights, such as placing orders for both buying and selling of the same asset by the same person for the purpose of soliciting transactions.
SEC Chairman Gary Gensler said:
Mr. Sun and his company provided and sold unregistered securities to U.S. investors, earning millions of dollars in illegal proceeds at the expense of the investors. On top of that, they made wash trades on unregistered trading platforms to make it look like they were actively trading TRX.
At this time, Sun has not released a statement on the matter.
Eight celebrities also sued
“Mr. Sun paid celebrities with millions of followers to promote unregistered products, with explicit instructions not to disclose the payments,” said SEC executive director Gurbil Grewal. Stated.
The SEC is suing eight celebrities, including actress Lindsay Lohan, YouTuber Jake Paul, rappers Soulja Boy and Akon, for promoting Sun’s token.
Six of them have already settled with the SEC without admitting or denying the contents of the complaint, paying fines of more than 52 million yen ($400,000) and the return of unfair profits. agreed to do so.
There are also voices that the judgment of “unregistered securities” is arbitrary
The SEC has so far sued various cryptocurrencies as “unregistered securities,” but has not provided clear guidelines on this matter, and has been criticized for arbitrarily enforcing the law. ing.
In a recent related case, major U.S. cryptocurrency exchange COINBASE has been harshly criticizing recent SEC actions that suggest “some staking services may be considered securities.”
connection: “Why should staking services be excluded from securities certification?” US Coinbase filed a petition with the SEC
SEC sues Tron founder Justin Sun appeared first on Our Bitcoin News.