According to the SEC, Sun allegedly orchestrated an offer and sale of Tron Tokens that went against SEC regulations. Additionally, the agency alleges that Sun engaged in manipulative trading and unlawful touting of crypto assets securities. These charges could result in serious penalties for Sun, including monetary fines and prison time.
Sun established the BitTorrent Foundation in late 2016 in order to promote and develop the BitTorrent protocol. Rainberry was a subsidiary of the foundation that marketed and sold two tokens: TRON, or TRX, and bitTorrent, or BTT. The SEC alleges that Sun and the foundation sold unregistered securities via Rainberry, prompting calls for cryptocurrencies to be reclassified as such. While opinion on whether cryptocurrencies should be classified as securities is divided, this lawsuit highlights some of the challenges associated with regulating these new markets
The SEC’s charge against tokens created by The DAO led to the prices of both tokens dropping precipitously. Many investors saw the news as a sign that these types of investments were risky and opted not to invest.
The SEC filing states that the Sun defendants offered and sold TRX and BTT as securities, but never registered them with the SEC. This may have led to serious legal problems for these companies.
The SEC alleges that the defendants in the case were directing the “manipulative wash trading of TRX to create the artificial appearance of legitimate investor interest and keep TRX’s price afloat.” This alleged manipulation is said to have kept TRX’s value high, preventing it from falling below its all-time low.
During this time, Sun and the Tron Foundation were actively soliciting investors and selling their TRX tokens. The SEC noted that despite these efforts, Sun only made $31.9 million from the sale of TRX tokens. This suggests that Sun may not have been very successful in promoting the adoption of TRX by potential users or merchants.
The government agency is suing a handful of celebrities and influencers for using their platforms to endorse products that were not approved by the agency. The lawsuits include Lindsay Lohan, Soulja Boy, Austin Mahone, Michelle Mason, Lil Yachty, Ne-Yo and Akon. The government believes that these celebrities and influencers should have known better and should have been more careful about what products they endorsed.
The SEC has filed charges against several celebrities for their endorsements of cryptocurrency, TRX and BitTorrent. The celebrities were paid to promote TRX and BTT, but their touts on social media did not disclose that they had been paid or the amounts of their payments. This prevented the public from accurately gauging the celebrities’ true interests in these projects, which may have led some investors to believe that they had an unbiased stance towards them.
Soulja Boy, Mahone, and the rest of the celebrities who reached a settlement with the SEC over their investments in a fraudulent Nigerian money-laundering scheme will have to cough up over $400,000 in penalties. The singers and actors will also have to pay back interests and disgorgement, which is financial restitution given for profits gained from illegal activities. This is a significant win for the SEC as it demonstrates that celebrities are not immune from prosecution when it comes to breaking securities laws.
The SEC charged chairman of Sun Life Financial, Thomas J. Marino, 60, of Deerfield Beach, Florida and his firms with defrauding investors out of millions in illegal proceeds by targeting them with unregistered crypto asset securities sales and helping to coordinate wash trading on an unregistered trading platform. The campaign was orchestrated by Sun himself who hid the fact that celebrities were paid for their tweets promoting TRX and BTT.
