Justin Sun, the creator of the cryptocurrency platform Tron, has been charged for selling unregistered crypto securities and fraudulently manipulating the secondary market for Tronix, the platform’s native asset. The allegations were made public by the chief security supervisor in the country, who published the accusations against Sun. On Wednesday, the Securities and Exchange Commission (SEC) made the announcement that Tron founder Justin Sun and his businesses had breached securities laws. The SEC accused Tron creator Sun of market manipulation, deception, and airdropping unregistered securities to investors.
The charges against Sun and eight celebrities were revealed by the Securities and Exchange Commission (SEC). The eight celebrities include the actress Lindsay Lohan, the social media personality Jake Paul, the porn star Kendra Lust, and the musicians Lil Yachty, Austin Mahone, Soulja Boy, Ne-Yo, and Akon. The SEC alleges that these individuals illegally promoted Tronix and another token called BitTorrent. With the exception of Soulja Boy and Mahone, the six other personalities reached a settlement with the SEC in which they agreed to pay a total of $400,000 in disgorgement, interest, and penalties. They did this without acknowledging or disputing the conclusions of the regulator.
This case demonstrates again the high risk investors face when crypto asset securities are offered and sold without proper disclosure.Gary Gensler, SEC Chair
At the same time, Sun paid celebrities with millions of social media followers to tout the unregistered offerings, while specifically directing that they not disclose their compensation. This is the very conduct that the federal securities laws were designed to protect against regardless of the labels Sun and others used. SEC enforcement chief Gurbir Grewal said in a statement.Gurbir Grewal, Enforcement Chief – SEC
Sun, a Chinese citizen, attended the University of Pennsylvania for graduate degree and is currently located in either Singapore or Hong Kong, as reported by the SEC. For the time being, he represents Grenada as their World Trade Organization representative. According to the SEC’s allegations, he lied about the celebrity promoting campaign by claiming, falsely, that celebs who support TRON were obligated to reveal that fact when, in reality, their social media accounts did not divulge that information.