The Securities and Exchange Commission has sued Tron founder Justin Sun for allegedly promoting unregistered crypto assets via celebrities like Jake Paul and Lindsay Lohan (shown). File Photo by Sven Hoogerhuis/UPI | License Photo
March 22 (UPI) -- The Securities and Exchange Commission has charged Grenadian diplomat and Tron founder Justin Sun for allegedly promoting and manipulating unregistered crypto asset securities.
The SEC complaint, filed in the U.S. District Court for the Southern District of New York, alleges that Sun manipulated trading to give false legitimacy to his unregistered cryptocurrencies.
Sun accomplished this by "orchestrating a promotional campaign in which he and his celebrity promoters hid the fact hat the celebrities paid for their tweet," according to SEC Chair Gary Gensler.
The complaint also accuses Sun of engaging in so-called "wash trades."
"From at least April 2018 through February 2019, Sun allegedly directed his employees to engage in more than 600,000 wash trades of TRX between two crypto asset trading platform accounts he controlled, with between 4.5 million and 7.4 million TRX wash trades daily," the complaint reads.
"This scheme required a significant supply of TRX, which Sun allegedly provided. Sun also allegedly sold TRX into the secondary market, generating proceeds of $31 million from illegal, unregistered offers and sales of the token," the complaint says.
The SEC also sued Sun's BitTorrent Foundation and Tron Foundation, as well as Rainberry Inc.
Sun became famous for enlisting celebrities like Lindsay Lohan and Jake Paul to promote his Tronix and BitTorrent tokens on their social media profiles.
Eight celebrities who agreed to promote Sun's crypto products have been charged by the SEC for failing to disclose the fact that they were paid to do so.
The celebrities charged separately are Lindsay Lohan, Jake Paul, Austin Mahone, Michele Mason, a.k.a Kendra Lust, DeAndre Cortez Way. a.k.a. Soulja Boy, Miles Parks McCollum, Shaffer Smith, a.k.a. Ne-Yo, and Aliaune Thiam, a.k.a., Akon.