Tron founder Justin Sun and three of his companies are being sued by the US Securities and Exchange Commission (SEC) over allegations of fraud, market manipulation and airdropping unregistered securities to investors.
Eight celebrities, including US actress Lindsay Lohan and influencer Jake Paul, have also been charged for not disclosing they were paid to promote Sun’s crypto assets.
The SEC said it was suing Sun and his companies the Tron Foundation, the BitTorrent Foundation and BitTorrent (now known as Rainberry) over the sale of the cryptocurrencies Tronix (TRX) and BitTorrent (BTT), which the SEC said were unregistered securities.
Sun and his companies are also accused of “fraudulently manipulating” TRX on the secondary market “through extensive wash trading,” the financial watchdog said in a press release.
“The complaint further alleges that Sun, BitTorrent Foundation, and Rainberry offered and sold BTT in unregistered monthly airdrops to investors, including in the United States, who purchased and held TRX in Tron wallets or on participating crypto asset trading platforms.
“According to the complaint, each of these unregistered offers and sales violated Section 5 of the Securities Act.”
Lohan and Paul were charged along with celebrities Michele Mason, who is a porn star known as Kendra Lust; rappers Miles ‘Lil Yachty’ McCollum and DeAndre ‘Soulja Boy’ Cortez Way, and musicians Shaffer ‘Ne-Yo’ Smith, Austin Mahone and Aliaune ‘Akon’ Thiam.
With the exception of Mahone and Cortez Way, the celebrities had settled their cases and paid penalties, without any admitting or denying any charges, the SEC said.
*Note that the portrait image heading this article is AI-generated, based on Justin Sun’s likeness (Polemos/MidJourney)
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