Justin Sun, Celebrities Including Lindsay Lohan, Akon, Jake Paul Charged For Role In BitTorrent, Tronix Promotion
The Securities and Exchange Commission this afternoon continued its crackdown on crypto, charging Justin Sun and his firms BitTorrent, Rainberry and the Tron Foundation for the unregistered offer and sale of crypto asset securities. Included in the crackdown were several celebrities whom assisted Sun in marketing the crypto.
The charges in the SEC complaint specifically relate to the offer and sale of Tronix (TRX) and BitTorrent (BTT) crypto. At the same time, the SEC accused Sun of fraud for “extensive” wash trading on TRX to inflate the perceived demand for the crypto. The commission alleges over 600,000 wash trades occurred on TRX from April 2018 through to February 2019, which Sun is said to have instructed his employees to conduct.
The complaint, filed in the Southern District of New York, allege that Sun used “bounty programs” to convince consumers to promote the cryptocurrencies in exchange for TRX and BTT, which in essence is a referral program.
“As alleged in the complaint, Sun and others used an age-old playbook to mislead and harm investors by first offering securities without complying with registration and disclosure requirements and then manipulating the market for those very securities,” stated Gurbir Grewal, Director of the Division of Enforcement for the SEC.
Concurrently, the SEC has charged several celebrities with illegally touting the coins without disclosing they were compensated. Those charges include Lindsay Lohan, Jake Paul, Soulja Boy, Austin Mahone, Kendra Lust, Lil Yachty, Ne-Yo and Akon.
“Sun paid celebrities with millions of social media followers to tout the unregistered offerings, while specifically directing that they not disclose their compensation. This is the very conduct that the federal securities laws were designed to protect against regardless of the labels Sun and others used,” continued Grewal.
The celebrities as part of a settlement, the celebrities agreed to pay more than $400,000 in penalties and disgorgement, without admitting or denying the findings, with the exception of Mahone and Soulja Boy.
Information for this briefing was found via the SEC and the sources mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
As the founder of The Deep Dive, Jay is focused on all aspects of the firm. This includes operations, as well as acting as the primary writer for The Deep Dive’s stock analysis. In addition to The Deep Dive, Jay performs freelance writing for a number of firms and has been published on Stockhouse.com and CannaInvestor Magazine among others.