On March 22, the United States Securities and Exchange Commission announced charges against billionaire and Chinese blockchain entrepreneur Sun Yuchen, also known as Justin Sun, and three of his wholly-owned companies: Tron Foundation Limited, BitTorrent Foundation Ltd., and Rainberry Inc., a business that was formerly known as BitTorrent.
The complaint claims that Sun and his businesses engaged in "extensive wash trading," making more than 600,000 such trades, to distort the secondary market for Tron (TRX) tokens. It also claims that Sun and his businesses paid celebrities to promote TRX and BitTorrent (BTT) tokens with no transparency.
Lindsay Lohan, Jake Paul, and other well-known American celebrities were identified as defendants for their alleged roles in marketing TRX and BTT without the required disclosure. Since then, some have reached SEC settlements. The SEC also claims that airdrops and bounty schemes used to advertise TRX and BTT were unregistered investments. The head of the SEC, Gary Gensler, said:
As alleged, Sun and his companies not only targeted U.S. investors in their unregistered offers and sales, generating millions in illegal proceeds at the expense of investors, but they also coordinated wash trading on an unregistered trading platform to create the misleading appearance of active trading in TRX.”
Justin Sun is a prominent player in the cryptocurrency sector who became well-known through Tron's $70 million ICO in 2017. The ICO apparently took place one day before the Chinese government declared a total ban on all ICOs in the nation. Sun utilised his newly acquired cash from the profitable ICO to buy the peer-to-peer downloading platform BitTorrent before, according to reports, leaving Beijing and relocating to San Francisco.
According to reports, Sun kept a low profile while in the United States and presented himself as an upright businessman running from the threat of communism. But similar rhetoric has been heard before, according to American authorities.
Chinese billionaire Guo Wengui was detained on March 15 as part of an investigation into his alleged involvement in a $1 billion stock and cryptocurrency fraud scheme, according to a statement from the US Department of Justice. Guo promoted to his audience the value of his cryptocurrency exchange, blockchain technology, and tokens he had developed in the struggle against communism just days before his arrest.
Sun may have made the choice to leave the United States in 2020 and relocate to Grenada, a sunny Caribbean island, due to the concern of American authorities. Since then, he has been appointed the nation's ambassador to the WTO. Apart from foreign policy responsibilities and the fancy title "His Excellency," the position also gives Sun a diplomatic passport, which supposedly offers immunity from prosecution.
Sun seems to be thriving in his new home despite the problems. Even while Sun officially maintains he is only a humble "adviser" in Huobi's day-to-day operations, Sun apparently bought 100% of the co-founders' holdings in cryptocurrency exchange Huobi Global last November.
According to a January Asia Express report, Sun allegedly ordered the direct termination of many Huobi employees' benefits. Following regulatory criticism against its own stablecoin Binance USD, cryptocurrency exchange Binance has also dramatically reduced the use of Tron Tether (TRC-20 USDT) in other areas.
Editor- Sarah Fathima Ahmed