US Securities and Exchange Commission (SEC), Justin Sun and Tron (TRX) and BitTorrent (BTT) announced that it is filing lawsuits against three affiliated firms over allegations of illegal sale of cryptocurrencies.
News of the lawsuit had a positive impact on the TRX price, with its value dropping over 6%.
SEC Chairman Gary Gensler In a statement, he stressed that this lawsuit exemplifies the potential risks crypto investors may face with unregistered securities.
According to the lawsuit, Sun and its affiliates have billions TRX And BTTIt has made a deliberate move to distribute .
The SEC alleges that Sun and its companies have targeted US investors in their unregistered offers and sales, generating millions of illegal revenues at the expense of investors.
The SEC also claims that defendants in the case must register bids and sales with the agency. According to the same allegations, the recordings in question never took place.
In the details of the lawsuit, it is also stated that Justin Sun created a false reason to attract the attention of investors in order to profit from TRX. In simple terms, this means that he claims to have determined a manipulative approach. Sun allegedly carried out this trading transaction through the Tron Foundation, BitTorrent Foundation, and Rainberry.
The SEC also directly disclosed the details of the case, claiming that Sun and its affiliates had created a promotional campaign to attract public attention to TRX and BTT. This promotion includes paying celebrities like Austin Mahone, Jake Paul, and Lindsey Lohan to promote or praise TRX and BTT on their social media accounts without disclosing that they have been paid or the amount of the payment.
As a result of the lawsuit, Sun and the companies involved in the lawsuit may face penalties related to unfair gains, in addition to drastic measures.
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