TRON Founder Justin Sun was served with a legal notice by the US Securities and Exchange Commission [SEC] for illicit sales of the cryptocurrencies TRX and BitTorrent [BTT], respectively.
The Chinese crypto entrepreneur and his firms Tron Foundation, BitTorrent Foundation, and Rainberry were accused of distributing billions of the above-mentioned crypto assets since August 2017.
As per the suit filed by the SEC in the Southern District of New York, Sun also engaged in manipulative wash trading of TRX to create artificial demand and keep TRX’s price afloat.
Sun accomplished this wash trading through his firms, SEC alleged. The regulator also accused the crypto billionaire of misleading investors with false claims on social media, in February 2021.
“To drive public interest in TRX and BTT, the Sun Defendants created a publicity campaign that involved paying celebrities, including Defendants Austin Mahone [“Mahone”] and DeAndre Cortez Way, among others, to promote or tout TRX and BTT on their social media accounts, which had millions of followers”.
Justin Sun responded to the lawsuit on Twitter by claiming that the SEC’s civil complaint is without substance and that the foundation would continue to create the most decentralized financial system possible.
The SEC’s civil complaint earlier today is just the latest example of actions it has taken against well-known players in the blockchain and crypto space. We believe the complaint lacks merit, and in the meantime will continue building the most decentralized financial system.
Apart from a cryptic Chinese tweet that read, “Big Pumps,” Sun had not provided any additional information as of the time of publishing this story.
TRON’s Native Token TRX Plummets By Over 16% In 6 Hours
The TRON founder was among several other individuals that were charged with illegally advertising his crypto holdings by the regulators, along with artist Soulja Boy and actress Lindsay Lohan.
Gary Gensler, the chair of the SEC, underlined in his statement that this case serves as a warning of the possible dangers that holders of unregistered securities may encounter.
The price of TRX has been significantly impacted by the lawsuit news, with the token’s value dropping more than 16% in a span of just 6 hours.
At press time, the 15-ranked token is still down by over 7% in the last 24 hours to trade at $0.06.