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controversial crypto entrepreneur justin sun Tron is facing a lawsuit from the US Securities and Exchange Commission (SEC) over plans to pay celebrities clean start and BitTorrent (btt) token.
according to a Press release From the SEC, the lawsuit specifically revolves around Sun’s use of celebrities without disclosing that they were paid.
At the same time, Sun allegedly worked to create the appearance of high trading volume in the TRX token by instructing his employees to make more than 60,000 so-called wash trades on the two trading platforms.
wash trades They are trades where the same party acts as both buyer and seller, and they are usually made to artificially inflate trading volume on specific exchanges or for specific tokens.
Airdrop of unregistered securities
In its announcement, the SEC said that so-called airdrops and bounty programs, which promise payment in tokens, constitute an “unregistered offer and sale” of securities, which violates Section 5 of the US Securities Act.
To this end, the SEC has now charged Justin Sun with violating anti-fraud and market manipulation provisions of the federal securities laws.
eight celebrities accused
In addition to Sun and his companies, eight celebrities including YouTuber Jake Paul and actress Lindsay Lohan were also charged by the SEC for their roles in promoting the token without disclosing that they were paid by Sun to do so .
With the exception of DeAndre Cortez Way (also known as Soulja Boy) and Austin Mahone, all of the celebrities charged in the case have agreed to settlements with the SEC worth more than $400,000.
In a comment, SEC Chairman Gary Gensler said the case “highlights the high risk investors face when crypto asset securities are offered and sold without proper disclosure,” adding:
“As alleged, Sun and his companies not only targeted US investors in their unregistered offers and sales, generating millions in illegal income at the expense of investors, but they also operated unregistered trading platforms to create the deceptive appearance of active trading.” But also coordinated wash trading. In TRX.”