Unregistered Offerings and Sales
The SEC alleges that Justin Sun, founder of Tron, sold two cryptocurrencies (TRX and BTT) without registering them with the SEC or qualifying for an exemption. This violates federal securities laws.
Manipulative Trading
The SEC accuses Sun of directing “wash trading” of TRX to create the illusion of legitimate investor interest and keep the token’s price high. This involves trading between accounts controlled by Sun without any real change in ownership.
Deceptive Touting
The SEC claims that Sun falsely claimed that celebrities promoting Tron would disclose their compensation. However, the SEC alleges that Sun himself paid celebrities undisclosed amounts, violating anti-touting provisions.
SEC’s Relief Request
The SEC is seeking:
- A finding that Sun violated securities laws
- Permanent injunctions and conduct-based restrictions
- Prohibition on Sun acting as an officer or director of certain entities
- Disgorgement of profits
- Civil penalties
- Other relief to protect investors
Impact on Digital Assets
The outcome of this case will have significant implications for the regulation of digital assets. It could set precedents for how the SEC treats unregistered offerings and manipulative trading in the crypto market.
