SEC Levels Crypto Fees Again Justin Sun, Lindsay Lohan
Lindsay Lohan was among a group of celebrities accused by the SEC of illegally listing crypto assets. Hippolyte Petit/Getty Images
The Securities and Exchange Commission announced Wednesday that it charged Justin Sun, the founder of the TRON Foundation and owner of BitTorrent, and a number of celebrities, including Lindsay Lohan, for releasing and shilling for the cryptocurrencies Tronix (TRX) and BitTorrent (BTT), respectively.
The federal regulator said in a statement that Sun’s issuance and sale of TRX and BTT was akin to selling unregistered securities and alleged that he also manipulated the markets for tokens through wash trading — or falsely inflating the trading volume of an asset.
The SEC also targeted eight celebrities Sun allegedly paid — without disclosing their compensation — to claim TRX and BTT. They include Lohan, Jake Paul, Ne-Yo (Shaffer Smith) and Soulja Boy (DeAndre Cortez Way). Six of the eight people named, aside from Soulja Boy and Austin Mahone, have already settled with the agency and agreed to pay more than $400,000 in fines.
“This case demonstrates once again the high risk investors face when cryptoasset securities are offered and sold without proper disclosure,” SEC Chairman Gary Gensler said in a statement.
The announced charges, filed in the US District Court for the Southern District of New York, continue Gensler’s months-long crackdown on crypto companies and personalities since the FTX fall in November. Other targets of the SEC include cryptocurrency exchange Kraken as well as crypto firms Gemini and Genesis.
A protege of Jack Ma, best known as the co-founder of Chinese tech giant Alibaba, Sun splashed into the crypto world during the ICO craze of 2017, when he and TRON released TRX. He quickly raised $70 million—just days after the Chinese government banned initial coin offerings.
Sun, a Chinese national, fled Beijing to Seoul as TRX continued to rise in value. He used the money from the ICO to buy BitTorrent, the peer-to-peer file sharing system, for $140 million, according to The Verge and expanded his crypto empire through an acquisition of crypto firm Poloniex. In 2021, he resigned as CEO of the TRON Foundation to become Grenada’s Permanent Representative to the World Trade Organization.
The Sun did not immediately respond to a request for comment when contacted by Fortune. The TRON foundation did not immediately respond either.
