Justin Sun in Trouble with SEC
Justin Sun, the billionaire founder of Tron, is in hot water with the U.S. Securities and Exchange Commission (SEC). The SEC has filed a civil lawsuit against him and the U.S. District Court for the Southern District of New York has issued him a summons. Sun has only 21 days to respond or face a “default judgment” with potentially heavy penalties. This is a serious matter for Sun, who has been a crypto celebrity and hosted events in Hong Kong. He must now take action to protect himself from the SEC’s legal action.
Allegations Against Sun
Sun, who was born in China and claims citizenship in Grenada, is accused by the SEC of unregistered security sales of the Tron (TRX) token and the BitTorrent (BTT) token, as well as illegal touting and manipulation of the tokens’ prices. The SEC’s case states that Sun paid celebrities such as Soulja Boy, Lindsay Lohan, and Akon to endorse the tokens publicly, and also alleges he was behind “more than 600,000 wash trades of TRX” between two accounts he controlled during the period of April 2018 to February 2019.
Background to the Lawsuit
The U.S. Securities and Exchange Commission (SEC) has filed a lawsuit against Justin Sun after a 2022 crypto crash caused numerous bankruptcies. The SEC is not only suing Sun but has also applied for a permanent injunction that would prevent him from acting as a crypto securities director. This lawsuit is a part of the SEC’s efforts to protect investors from fraud and other illegal activities in the crypto market. The SEC is also seeking to recover any ill-gotten gains from Sun and to impose civil penalties. This case is a reminder that the SEC is serious about enforcing the law and protecting investors in the crypto space.
Interestingly, the U.S. court’s summoning of Sun was sent to two addresses in Singapore – where the Tron Foundation was established in 2017 – rather than a physical or even, as was seen in the case of Kyle Davies of Three Arrow Capital, a social media address. Despite the summons, Sun has continued to make confident public statements, with The Straits Times reporting that Sun recently posted a video of a Hong Kong crypto industry social event, boasting that “Our ultimate goal is to host cryptocurrency events in Beijing and Shanghai – I am confident we will be able to achieve it in a few years.”
Possible Penalties for Sun?
As the case moves forward, many will be wondering what the penalties will be should Sun lose the case and the SEC’s injunction is applied. With the potential for significant consequences, the one thing we can be sure of is that Justin Sun has a lot to lose. Whatever the outcome of the case, one thing is certain – the summons issued by the U.S. court has made it clear that the days of carefree crypto-celebrity culture and endorsement schemes are long gone. Sun’s 21-day deadline to respond to the summons is ticking, and the Tron founder will be in for a rough ride if he does not comply with the court’s order.