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The SEC is going after the Tron Network’s founder for allegedly selling securities in the latest action taken by US regulators against crypto industry players.
Justin Sun orchestrated the “unregistered offer and sale, manipulative trading, and unlawful touting of crypto asset securities,” according to an SEC press release and legal documents filed Wednesday in the US district court for the southern district of New York.
Sun founded the Tron network in 2017. The network launched its mainnet the following year and became a DAO in 2021.
The SEC alleges that starting in about August 2017, Sun distributed billions of TRX and BTT tokens to the public while creating secondary markets on which these assets could be traded.
Because Sun sold these as securities, the commission alleges, he was obligated to register these sales with the SEC, but never did.
The agency is also accusing Sun of “fraudulently manipulating the secondary market for TRX through extensive wash trading,” according to the press release.
It’s not the first time the SEC has targeted a crypto company for issuing a token it deems a security. Ripple has been battling with the agency in court for more than two years over its XRP token, which the vast majority of exchanges delisted when the lawsuit began in 2020.
The Tron Network and the SEC did not immediately return a request for comment.
This is a developing story.
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