SEC Sues Tron Founder Justin Sun Against Fraud, TRX Wash Trading Scheme

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  • The Securities and Exchange Commission believes that Justin Sun committed securities fraud.
  • The US regulatory agency called the unregistered securities TRX and BTT.
  • The SEC also believes that Sun implemented an aggressive trading scheme to support TRX trading volumes.

This year, regulators around the world began filing lawsuits against several cryptocurrency-related individuals and companies allegedly involved in criminal activities.

But the latest person to be charged with fraud and other criminal offenses is perhaps the most notorious in the cryptocurrency space to date. This person is the founder of Tron and a crypto billionaire Justin Sun.

SEC is suing Justin Sun for fraud

The US Securities and Exchange Commission (SEC) shocked the crypto world on Wednesday when it announced that it had done so Filed a lawsuit against Tron (TRX) founder Justin Sun For alleged securities fraud and other crimes.

The SEC alleges that Sun sold unregistered securities through three of his wholly owned companies, Tron Foundation Limited and BitTorrent Foundation Ltd. and Rainberry Inc. (formerly BitTorrent).

Tronix (TRX) and BitTorrent (BTT) are crypto assets that the SEC claims are unregistered securities.

The Securities and Exchange Commission also sued Sun for its operation Trade wash Scheme to artificially inflate TRX trading volume. The agency argues that Sun directed his employees to participate in more than 600,000 TRX laundering transactions between the two accounts of the crypto-asset trading platform he controls, with between 4.5 million and 7.4 million TRX laundering transacting daily.

“This scheme required a large supply of TRX, which was allegedly provided by Sun. Allegedly, Sun also sold TRX on the secondary market, generating $31 million in proceeds from illegal, unregistered offerings and token sales.”

TRX and BTT both gave up on the news but have recovered somewhat. TRX is trading at $0.064, down 3.6% on the day, according to data From CoinGecko.

SEC President Gary Gensler This case, he said, “illustrates once again the high stakes investors face when securities of crypto-assets are offered and sold without proper disclosure.”

“As alleged, Sun and his companies not only targeted U.S. investors in their unregistered offers and sales, generating millions in illegal proceeds at the expense of investors, but they also coordinated wash trading on an unregistered trading platform to create the misleading appearance of active trading in TRX. Sun further induced investors to purchase TRX and BTT by orchestrating a promotional campaign in which he and his celebrity promoters hid the fact that the celebrities were paid for their tweets.”

The SEC also sued celebrities who promoted Sun tokens on Twitter without disclosing that they were paid to do the operating system. Celebrities include Lindsay Lohan, Jake Paul, DeAndre Cortez-Way (Soulja Boy), Austin Mahone, Michelle Mason (Kendra Lost), Miles Parks McCollum (Lil Yacht), Shaffer Smith (Ne-Yo) and Alyon Thiam (Akon). All but Cortez Way and Mahon agreed to pay more than $400,000 to settle the fees.

on the flip side

  • Justin Sun has yet to comment on the accusations.

Why should you bother

Justin Sun was one of the most famous people in the cryptocurrency space. The charges against Sun may offer a glimpse into how he claimed that fame.

Read more about Justin Sun’s bid for Credit Suisse:

Justin Sun also offered to buy Credit Suisse, is a Web3-only bank possible?

Read more about Nexon building their game on Polygon:

Polygon enables Nexon to launch the MapleStory NFT Universe



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