(Yicai Global) March 23 -- Cryptocurrency entrepreneur Justin Sun is being taken to court by the US securities watchdog for offering and selling unregistered crypto assets without proper disclosure, in a scandal that has embroiled eight celebrities whom he recruited to tout his virtual assets.
Sun and three of the companies that he controls, Tron Foundation, BitTorrent Foundation and Rainberry, are accused of artificially boosting the trading volume of the Tron token (TRX) through extensive wash trading, which involves the near-simultaneous purchase and sale of a security to make it appear actively traded without an actual change in ownership.
Eight celebrities with huge social media followings, including Lindsay Lohan and Jake Pay, who were engaged by Sun to tout Tron and BitTorrent (BTT) with the instructions that they should not disclose their compensation, have also been charged by the US Securities and Exchange Commission.
The regulator also claimed that Sun, who has long been a controversial figure in the crypto sector, broke antifraud and market manipulation rules by orchestrating a scheme to artificially inflate the trading volume of Tron in the secondary market.
Sun, whose wealth mainly comes from Tron, shot to fame in 2019 when he auctioned off lunch rights with business tycoon Warren Buffett for USD4.5 million. The young man, who is in his thirties, left China before the government outlawed Initial Coin Offerings entirely in 2018, saying that they were vehicles for financial fraud and other criminal activities.
Editor: Kim Taylor