SEC Presses Charges Against Justin Sun & His Companies

On March 22, The Securities and Exchange Commission (SEC) pressed charges against the cryptocurrency entrepreneur Justin Sun and his companies. The companies mentioned in the document are Tron Foundation Limited, BitTorrent Foundation Ltd., and Rainberry Inc. (previously known as BitTorrent) for selling unregistered crypto asset securities Tronix (TRX), and BitTorrent (BTT). He has been charged with market manipulation through extensive wash trading, and encouraging celebrities to promote TRX and BTT without disclosing the amount. 

Aside from him, SEC has charged these celebrities for promoting TRX without disclosing paid promotion details, Lindsay Lohan, Jake Paul, DeAndre Cortez Way (Soulja Boy), Austin Mahone, Michele Mason (Kendra Lust), Miles Parks McCollum (Lil Yachty), Shaffer Smith (Ne-Yo), and Aliaune Thiam (Akon). According to the complaint, Sun and his companies have violated Section 5 of the Securities Act. The SEC has alleged that Sun and his employees actively engaged in 600,000 wash trades of TRX and illegally generated $31 million. It shows that investors can be at high risk of being duped if they don’t seek out proper disclosure, as per SEC chair Gary Gensler. The organization is quite strict about investor protection, according to Gurbir S Grewal, Director of the SEC’s Division of Enforcement. 

The case was filed in the US District Court for the Southern District of New York. All the celebrities agreed to pay $400,000 to settle the charges, except Cortez Way and Mahone.