The Securities and Exchange Commission sent out a press release today the announcement that “crypto entrepreneur” Justin Sun will face fraud charges for his manipulation of the crypto market. That’s great news, but also interesting is the fact that a slew of celebrities have been indicted alongside him.
Sun, along with three of its companies (Tron Foundation Limited, BitTorrent Foundation Ltd., and Rainberry Inc.), are accused of selling crypto through highly shady, MLM-like promotional deals, none of which have been registered and as a result, in violation of the securities law. He is then accused of violating the “anti-fraud and market manipulation provisions of … federal securities laws” by orchestrating “a scheme to artificially inflate the apparent trading volume” of his own cryptocurrencies:
The SEC’s complaint, filed in the U.S. District Court for the Southern District of New York, alleges that Sun and its companies offered and sold TRX and BTT as investments through multiple unregistered “bounty programs” that instructed interested parties to invest the tokens in to promote on social media, join Tron-affiliated Telegram and Discord channels and recruit others and create BitTorrent accounts in exchange for TRX and BTT distros. The complaint further alleges that Sun, BitTorrent Foundation and Rainberry offered and sold BTT in unregistered monthly airdrops to investors, including in the United States, who bought and held TRX in Tron wallets or on participating crypto-asset trading platforms . According to the complaint, all of these unregistered offers and sales violated Section 5 of the Securities Act.
The commission also alleges that Sun violated the provisions of the federal securities laws to combat fraud and market manipulation by orchestrating a plan to artificially inflate the apparent trading volume of TRX in the secondary market. From at least April 2018 to February 2019, Sun allegedly instructed its employees to perform more than 600,000 wash trades of TRX between two crypto asset trading platform accounts it controls, with between 4.5 million and 7.4 million TRX washes traded daily became. This scheme required a sizeable supply of TRX, which Sun reportedly provided. As claimed, Sun also sold TRX on the secondary market, raising $31 million in proceeds from illegal, unregistered offers and sales of the token.
All of this is bad! But alongside Sun, the SEC also accused a number of people he hired to promote his crypto scam, claiming they “illegally” promoted the currency “without disclosing that they were behind it and the amount of their money.” compensation were compensated”.
Bad too! The eight celebrities mentioned are
• 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)
If you’re wondering about possible penalties for these underhanded sellers, the SEC says that all but Soulja Boy and Austin Mahone “agreed to pay a total of more than $400,000 in disgorgement, interest and penalties to settle the charges, without it.” to admit or deny the SEC’s findings.”
