Tron’s native TRX token plunged today after the U.S. Securities and Exchange Commission hit the blockchain project’s founder with market manipulation, fraud and other charges.
TRX was down by 11.6% in the past 24 hours, CoinGecko data showed, trading for $0.059 at the time of writing. Its price had quickly nosedived after the SEC announced the charges against its founder.
The SEC on Wednesday accused Tron founder Justin Sun of manipulating the price of TRX—also known as Tronix—via his company, The Tron Foundation.
The federal watchdog also alleged that the crypto entrepreneur manipulated the price of BitTorrent’s BTT token.
BTT also sharply dropped by 2.3% the hour following the news, trading hands for $0.000000621040.
The SEC claimed that the two assets are unregistered securities and that Sun inflated their prices by “orchestrating a scheme to pay celebrities to tout TRX and BTT without disclosing their compensation.”
A number of celebrities—including Lindsay Lohan, Jake Paul, Soulja Boy, Lil Yachty and Akon—were listed in Wednesday’s lawsuit.
The SEC action targeted Sun’s three companies: the Tron Foundation, BitTorrent, and Rainberry. It also alleged that Sun walked away with illicit gains totaling $31 million from sales of TRX.
Tron is a blockchain network that aims to build a decentralized internet that is controlled and owned by the individuals who use it.
BitTorrent is a peer-to-peer file transfer protocol that allows users to share information over the Internet.
The SEC is ramping up enforcement actions against the crypto world: its Chairman Gary Gensler wants to crack down on all coins and tokens he believes to be unregistered securities. He has spoken out about celebrities shilling digital assets, too.
Last month, the regulator hit American crypto exchange Kraken with a $30 million fine because its staking product allegedly violated securities laws.
