The nation’s top security regulator announced charges against Justin Sun, founder of the crypto platform Tron, alleging that he sold unregistered crypto securities and fraudulently manipulated the secondary market for Tronix
TRXUSD,
the platform’s native token.
The Securities and Exchange Commission unveiled the charges against Sun and eight celebrities whom it alleges illegally touted Tronix and another token BitTorrent, including actress Lindsay Lohan, social media personality Jake Paul, porn star Kendra Lust, and musicians Lil Yachty, Austin Mahone, Soulja Boy, Ne-Yo and Akon.
With the exception of Soulja Boy and Mahone, the six other celebrities settled with the SEC, agreeing to pay a total of $400,000 in disgorgement, interest and penalties, without admitting or denying the regulator’s findings.
“This case demonstrates again the high risk investors face when crypto asset securities are offered and sold without proper disclosure,” said SEC Chairman Gary Gensler, in a statement.
The SEC’s complaint alleges Sun orchestrated a plan to sell Tronix tokens and another crypto security BitTorrent
BTTUSD,
without registering with the SEC and directing his company’s employees to conduct wash trades in these securities to “create the artificial appearance of legitimate investor interest and keep TRX’s price afloat.”
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