Watch Exclusive: The SEC has filed fraud charges against crypto asset entrepreneur Justin Sun and three of his fully owned companies

Credit Justin Sun Twitter

The SEC claims that Sun, a Chinese citizen in his thirties who represents Grenada at the World Trade Organization, lives in either Singapore or Hong Kong.

The main target of the SEC’s accusations is Justin Sun, a “crypto asset entrepreneur” who owns several businesses in the cryptocurrency industry. These include the Tron Foundation and the BitTorrent Foundation. The SEC has stated that he is being prosecuted “for the unregistered offer and sale of crypto asset securities Tronix (TRX) and BitTorrent (BTT),” respectively.

The main target of the SEC’s accusations is Justin Sun, a “crypto asset entrepreneur” who owns several businesses in the cryptocurrency industry. These include the Tron Foundation and the BitTorrent Foundation. The SEC has stated that he is being prosecuted “for the unregistered offer and sale of crypto asset securities Tronix (TRX) and BitTorrent (BTT),” respectively.

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Sun, according to the Commission’s allegations, devised a plan to artificially inflate the perceived trading volume of TRX in the secondary market, in violation of the antifraud and market manipulation provisions of the federal securities laws.

Credit Justin Sun Twitter

Between April 2018 and February 2019, Sun reportedly had his employees wash trade between 4.5 million and 7.4 million TRX per day between two accounts he controlled on a crypto asset trading platform. “Sun is accused of providing the massive quantities of TRX needed for this scheme.” It is claimed that Sun sold TRX on the secondary market for $31 million, using funds obtained from unregistered transactions of the token.

In addition, the SEC. has charged eight celebrities.

The SEC said, “With the exception of Cortez Way and Mahone, the celebrities charged today agreed to pay a total of more than $400,000 in disgorgement, interest, and penalties to settle the charges, without admitting or denying the SEC’s findings.”

Celebrities Lindsay Lohan, Jake Paul, and others are charged by the SEC of unlawfully promoting cryptocurrency. The SEC charges celebrities and influencers touting crypto tokens to inflate the prices using social media.

A New York federal district court received the complaint. Sun “induced investors to purchase TRX and BTT by arranging a promotional campaign in which he and his celebrity promoters obscured the fact that the celebrities were paid for their tweets,” according to a statement from SEC Chair Gary Gensler.

Eight celebrities including actress Lindsay Lohan, influencer Jake Paul and musician Soulja Boy have been charged by federal officials with fraudulently advocating two cryptocurrencies and failing to disclose they were paid to do so- which is illegal.

The SEC has formerly charged Lindsay Lohan and seven others:

  • Jake Paul

 

  • DeAndre Cortez Way (Soulja Boy)

 

  • Austin Mahone

 

  • Michele Mason (Kendra Lust)

 

  • Miles Parks McCollum (Lil Yachty)

 

  • Shaffer Smith (Ne-Yo)

 

  • Aliaune Thiam (Akon)

The celebrities named by the SEC were charged with “illegally touting” the TRX and/or BTT crypto tokens “without disclosing that they were compensated for doing so and the amount of their compensation.”  The celebrities have agreed to pay a total of more than $400,000 to settle the charges without admitting or denying the SEC’s findings.

Kim Kardashian was hit with a more than $1 million fine from the SEC in October for promoting EthereumMax digital tokens on Instagram without revealing that she was being paid to do so. Similar accusations were made against Floyd Mayweather Jr., DJ Khaled, and Steven Seagal in 2018 and 2020, respectively.

CWEB has provided some information for this story.

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