Tron Founder Justin Sun, Other Celebrities Charged Over Crypto Sales Violations

The Securities and Exchange Commission, SEC, this week, announced charges against crypto founder and Grenadian diplomat Justin Sun, alongside the celebrity backers of his Tronix(TRT) and BitTorrent(BTT) crypto assets, which include rapper Soulja Boy, actor Lindsay Lohan and social media personality Jake Paul.

The SEC alleged that Sun engaged in fraud by manipulating the trading activity of TRX and BTT, creating the appearance of active trading when it did not exist. He allegedly induced investors to purchase the tokens by “orchestrating a promotional campaign in which he and his celebrity promoters hid the fact that the celebrities were paid for their tweet,” SEC Chair Gary Gensler said in a statement. “...This case demonstrates again the high risk investors face when crypto asset securities are offered and sold without proper disclosure.”

Other celebrity backers are musician Austin Mahone, adult actress Michele Mason, known as Kendra Lust, musician Miles Parks McCollum, known as Lil Yachty, musician Shaffer Smith, also known as Ne-Yo and musician Aliaune Thiam, also known as Akon. They would promote the TRX and BTT tokens on social media and recruited others to Tron-affiliated Telegram and Discord channels.

Tron and his backers’ alleged behavior was part of an “age-old playbook to mislead and harm investors,” SEC enforcement chief Gurbir Grewal said in a statement. “.... At the same time, Sun paid celebrities with millions of social media followers to tout the unregistered offerings, while specifically directing that they 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.”

All the celebrity backers except for Soulja Boy and Mahone agreed to pay a collective $400,000 in disgorgement, interest and penalties to settle the charges.