The United States Securities and Exchange Commission (SEC) filed charges against Justin Sun, the founder of Tronix (TRX) tokens and three of his companies. It was allegedly reported that Justin had been illegally washing trades using TRX tokens. The securities regulator also charged both parties with selling and offering TRX and BitTorrent (BTT) tokens without authorisation.
The SEC revealed that it also filed charges against eight American celebrities for endorsing TRX and/or BTT without disclosing that they were being paid to do so in a press release issued on Wednesday. The regulator claimed that they also concealed their compensation.
The SEC simultaneously charged the following eight celebrities for illegally touting TRX and/or BTT without disclosing that they were compensated for doing so and the amount of their compensation.
• Lindsay Lohan
• Jake Paul
• DeAndre Cortez Way (Soulja Boy)
• Austin Mahone
• Michele Mason (Kendra Lust)
• Miles Parks McCollum (Lil Yachty)
• Shaffer Smith (Ne-Yo)
• Aliaune Thiam (Akon)
According to SEC, all celebrities, except for 'Soulja Boy' and Mahone, have agreed to pay a total settlement of over $400, 000 without admitting or denying the findings.
The SEC claimed that Sun engaged in “extensive wash trading” by artificially increasing the trading volume of TRX on the secondary market and violating antifraud and market manipulation provisions of federal securities laws in its lawsuit submitted to a district court in New York. Also, the regulator charged the founder of TRON with making $31 million in unauthorised gains from selling “unregistered” TRX on the secondary market.
Sun is accused of ordering his staff to execute more than 600,000 TRX wash trades between two accounts he controlled on cryptocurrency asset trading platforms from (approximately) April 2018 through February 2019, with between 4.5 million and 7.4 million TRX wash trades per day, according to the SEC.
The regulator further claimed that Sun and his businesses, Tron Foundation Ltd., BitTorrent Foundation Limited, and Rainberry Inc., set up several unregistered bounty campaigns where they promoted and marketed TRX and BRT as investments. Additionally, they conducted monthly unregistered airdrops, offering BTT to buyers, including people in the US.
Gary Gensler, the Chair of SEC, highlighted that through this scenario, it is evident that the crypto asset industry still possesses a high level of investment risk as they could be issued and sold quickly without sufficient disclosure.
In conjunction with Genslers reminder, we at WikiFX would like to urge all users to conduct through background checks before engaging with any broker to safeguard your trading capital. Simply download our free WikiFX mobile app or visit www.wikifx.com and fully utilize our searchbar to your advantage.
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