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U.S. SEC Files Lawsuit Against Tron Founder Justin Sun

Coindesk | Nikhilesh De | Mar 22, 2023

Justin Sun source video screenshot YouTube Tron - U.S. SEC Files Lawsuit Against Tron Founder Justin Sun

Image: Justin Sun - video screenshot, YouTube, Tron

The regulator alleged TRX and BTT are unregistered securities, and claimed Sun created an "extensive wash trading" program to boost their trading volume.

  • The SEC said in a press release it was suing Sun, the Tron Foundation, the BitTorrent Foundation and BitTorrent (now known as Rainberry) over the sale of tronix (TRX) and bitTorrent (BTT) tokens, which the regulator described as unregistered crypto asset securities. The regulator further alleged the defendants "fraudulently manipulat[ed]" TRX's secondary market through an "extensive wash trading" scheme.

See:  SEC Warns Investors: Be Vigilant Regarding Crypto Asset Securities

  • The SEC alleged, by having his own employees "engage in more than 600,000 wash trades of TRX between two crypto asset trading platform accounts he controlled." According to the court filing, Sun's Tron Foundation employees conducted the trades, the BitTorrent and Tron foundations controlled the accounts and Rainberry employees transferred funds for the trading.
  • Celebrity influencers: The agency is also suing Lindsay Lohan, Jake Paul, Soulja Boy, Lil Yachty, Ne-Yo, Akon and Michele Mason on illegal touting charges for their roles allegedly promoting TRX and BTT without disclosing they were paid to do so. The majority of these celebrities settled the charges.

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