The United States Securities and Exchange Commission (SEC) has charged Tron blockchain founder Justin Sun, affiliated companies, and eight other celebrities over claims of promoting “unregistered securities” and manipulating the market.
U.S. SEC Terms TRX and BTT As Securities
In a Wednesday press release, the financial agency alleged that Justin Sun and his three companies aided the marketing of two Tron-based cryptocurrencies, TRX and BTT. The firms mentioned were the Tron Foundation, BitTorrent Foundation, and Rainberry Inc.
The allegations are based on claims that these tokens are securities and should have been registered under the regulatory agency before being shipped to U.S.-based investors. The SEC stated that TRX and BTT were promoted through several marketing campaigns like airdrops.
The financial watchdog added that Sun masterminded a “manipulative wash trading of TRX.” It is a scheme used to artificially inflate the value of an asset by performing fake trades involving that asset.
Unsurprisingly, TRX’s price plummeted following the news of the agency’s charge. The asset fell by as much as 14%. It has regained some of its value and currently trades at $0.059. Other cryptocurrencies linked to Justin Sun have also dropped mildly. These include the Huobi token (HT), Just (JST), and Sun token (SUN).
Eight Celebrities Caught In SEC’s Net
The financial agency stated in its press release that eight celebrities have involved themselves in Sun’s marketing crusade. They are Lindsay Lohan, Soulja Boy, Lil Yachty, Jake Paul, Michele Mason, Akon, Austin Mahone, and Ne-Yo.
Sun allegedly paid these entities an undisclosed amount to promote the TRX and BTT tokens. Aside from Soulja Boy and Mahone, other public figures agreed to a $400,000 settlement. While doing this, they did not admit or deny the claims of the SEC.
This is not the first time celebrities will be caught in the crossfire of the SEC. In October 2022, the media personality Kim Kardashian was imposed with a fine of $1.26 million over the promotion of Ethereum Max (EMAX). Last month, the basketball celebrity Paul Pierce agreed to a $1.4 million fine over the advertisement of the same EMAX token.
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