Justin Sun and 8 celebrities sued by the Securities and Exchange Commission (SEC)

On Tuesday, March 22, 2023, the SEC filed a lawsuit against Justin Sun, the founder of Tron, alleging that he manipulated the securities market by falsely promoting the cryptocurrencies TRX and BTT. In addition, several celebrities, including Lindsay Lohan and Akon, are being sued.

According to the complaint, Mr. Sun allegedly made false and misleading statements about these two cryptos, which artificially inflated their prices and misled investors.

In its complaint, the U.S. regulator also accuses Justin Sun and his companies of engaging in wash trading (market manipulation) with the TRX token. A practice in which an investor simultaneously buys and sells an asset to give the impression of greater trading volume, which can drive up the price of the asset in question.

Millions in illegal income according to the SEC?

The SEC’s charges against Sun are significant because Tron is one of the largest cryptos on the market, with a market capitalization of over $10 billion. Sun is a prominent figure in the crypto industry, having been recognized for his previous work as the founder of Peiwo, a social media platform that was integrated into Tron in 2020.

Sun has yet to respond to the SEC’s accusations. However, Tron’s official Twitter account issued a statement on March 23, saying the company was aware of the charges and would cooperate fully with the SEC’s investigation.

This is not the first time Mr. Sun has been in legal trouble. In 2020, he was accused of plagiarizing the Tron white paper, which led to widespread criticism of the project. The following year, Mr. Sun was also charged with fraud and misrepresentation in a lawsuit brought by Chinese investors.

The charges against Mr. Sun highlight the need for greater regulatory oversight in the crypto industry.

At the same time, these famous celebrities are accused of promoting the two digital coins on social networks.

They are Lindsay Lohan, Jacques Paul, DeAndre Cortez Way (Soulja Boy), Austin Mahone, Michele Mason (Kendra Lust), Miles Parks McCollum (Lil Yachty), Shaffer Smith (Ne-Yo) and Aliaune Thiam (Akon).

Sun and his companies not only targeted U.S. investors in their unregistered bids and sales, generating millions in illegal revenue, but they also coordinated sham trading on an unregistered platform to create the deceptive appearance of active trading. Sun further induced investors to purchase TRX and BTT by orchestrating a promotional campaign in which he and his promoters concealed the fact that celebrities were paid for their tweets,” said SEC Chairman Gary Gensler.