The Securities and Exchange Commission (SEC) announced Wednesday that Tron founder Justin Sun and his companies violated securities laws, accusing him of market manipulation, fraud, and airdropping unregistered securities to investors.
In addition to Sun himself, the financial watchdog said it was suing the Tron Foundation, BitTorrent, and Rainberry—three companies owned by Sun. The lawsuit claims that cryptocurrencies Tronix (TRX) and BitTorrent (BTT) are unregistered securities and that Sun manipulated them on the secondary market, as did his companies.
“Sun violated the antifraud and market manipulation provisions of the federal securities laws by orchestrating a scheme to artificially inflate the apparent trading volume of TRX in the secondary market,” the SEC claimed in a press release.
The alleged market manipulation took place between April 2018 and February 2019, when Sun directed his employees to conduct at least 600,000 TRX wash trades between two exchanges he owned, the lawsuit claims. The agency alleged that Sun walked away with illicit gains totaling $31 million from sales of the token.
At the same time, the SEC announced it was charging a litany of celebrities for not disclosing they were paid to promote the Tronix and BitTorrent tokens. The celebrities included Lindsay Lohan, Jake Paul, Soulja Boy, Lil Yachty, and Akon.
This story is breaking and will be updated with additional information.
