32.5 C
Dubai
Saturday, May 25, 2024
HomeAltcoin NewsThe SEC Targets Tron in Latest Crypto Case

The SEC Targets Tron in Latest Crypto Case

Date:

Related stories

The Securities and Exchange Commission (SEC) is going after Justin Sun of Tron fame and a wide array of celebrities he hired to at one point, serve either as promoters or brand ambassadors for the company.

The SEC Is Going After Tron

At the time of writing, securities fraud charges have been filed against Tron, the famed crypto company. In addition, several well-known figures – including musician Lindsay Lohan and internet personality Jake Paul – have been caught up in the case. The agency alleges that Sun engaged in fraud by manipulating the activity of various tokens. He thus created the image that valid and real trading was occurring when, in fact, it was not.

The company is also under the SEC’s gaze for taking part in an unregistered token offering. SEC chair Gary Gensler commented in a recent statement:

This case demonstrates again the high-risk investors face when crypto asset securities are offered and sold without proper disclosure.

Right now, the tokens that are alleged to have been part of Sun’s “infamous” scheme are TRX and BTT. Gensler continued his statement by commenting that Sun orchestrated a “promotional campaign in which he and his celebrity promoters hid the fact that the celebrities were paid for their tweet[s].”

This is something we have seen time and time again not just from the SEC, but from financial agencies around the world. One such case recently occurred with reality star Kim Kardashian, who failed to reveal that her promotion of a new cryptocurrency called Ethereum Max was not done out of her own goodwill. Rather, she had received compensation to promote the asset, something she was required to tell all her fans and followers.

Many of the celebrities in question have already agreed to settle with the SEC. Several will forfeit as much as $400,000 in disgorgement, interest, and penalty fees to alleviate the charges. However, some – such as Soulja Boy – are fighting back and refusing to give in. It’s unclear what their chances in court are.

The celebrities were under contract to promote both TRX and BTT on social media and in Tron-affiliated Discord and Telegram channels. Gurbir Grewal – SEC enforcement chief – commented that Tron was at the center of an “age-old playbook to mislead and harm investors.” He further stated:

At the same time, Sun paid celebrities with millions of social media followers to tout the unregistered offerings, while specifically directing that they [do] not disclose their compensation. This is the very conduct that the federal securities laws were designed to protect against regardless of the labels Sun and others used.

Kraken Is the Latest Victim

The SEC has been at the heart of several crypto-related takedowns as of late, a recent one being Kraken.

The company was forced to part with $30 million and cease all its staking services.

Nick Marinoff
Nick Marinoffhttps://www.livebitcoinnews.com/
Nick Marinoff is currently a lead news writer and editor for Money & Tech, a San Francisco-based broadcasting station that reports on all things digital currency-related. He has also written for a number of other online and print publications including Black Impact Magazine, EKT Interactive, Seal Beach USA and Benzinga.com, to name a few. He has recently published his first e-book "Take a 'Loan' Off Your Shoulders: 14 Simple Tricks for Graduating Debt Free" now available on Amazon. He is excited about the potential digital currency offers, particularly its ability to finance unbanked populations and bring nations together financially.

Subscribe

Latest stories