u.today
The US Securities and Exchange Commission (SEC) has filed a lawsuit against Justin Sun, the founder of blockchain platform TRON, and three affiliated firms over allegations of illegal sales of cryptocurrency securities.
The SEC claims that Sun and his companies engaged in unregistered offers and sales of TRON's native token, TRX, generating $31 million from these illegal activities.
According to the regulatory agency, Sun provided a significant supply of TRX for the scheme and sold the tokens into the secondary market.
The SEC also alleges that Sun and his companies targeted US investors in their unregistered offers and sales, generating millions in illegal proceeds at the expense of investors.
In addition to this, they coordinated wash trading on an unregistered trading platform to create the misleading appearance of active trading in TRX.
Sun is further accused of inducing investors to purchase TRX and BitTorrent Token (BTT) by orchestrating a promotional campaign in which he and his celebrity promoters concealed the fact that the celebrities were paid for their tweets.
SEC Chair Gary Gensler emphasized that this case serves as an example of the potential risks crypto investors may face with unregistered securities.
The news of the lawsuit has had a significant impact on the price of TRX, with the token's value plunging by 6.1% following the announcement.