Justin Sun, the founder of Tron, has reportedly received a summons to respond to the Securities and Exchange Commission (SEC) lawsuit filed against him on March 22 in the Southern District of New York. The lawsuit alleges that Sun, through his companies Tron Foundation, BitTorrent Foundation, and Rainberry Incorporated, sold and airdropped unregistered securities, committed fraud and market manipulation, and manipulated the market for TRX to create the appearance of legitimate investor interest.
According to SEC, Sun has 21 days to respond to the summons, which was mailed to two locations in Singapore, including his residential and office address. Failure to respond in time could result in the court ruling in favor of the plaintiff.
The SEC lawsuit also named two musicians, Austin Mahone and DeAndre Cortez Way, known as Soulja Boy, who were allegedly involved in promoting the two cryptocurrencies without disclosing their compensation.
While several celebrities named in the lawsuit have settled their respective charges, Mahone and Soulja Boy were named in the latest summons. Bloomberg had earlier reported that Sun was the majority shareholder of Huobi Global, but he denied being the owner of a roughly 60 percent stake.
In a statement on March 22, SEC chairman Gary Gensler described Sun as not just targeting US investors but also coordinating wash trading to create a misleading impression of active trading in TRX. He added that Sun further induced investors to purchase TRX and BTT by orchestrating a promotional campaign in which he and his celebrity promoters hid the fact that the celebrities were paid for their tweets.
Read more:
- Justin Sun Earns $3.3 Million By Buying USDC With USDT During Depegging
- TRON’s TRX Falls Over 10% Following SEC Charges Against Justin Sun
- Justin Sun Responds To SEC’s Legal Action, Calling It A “Civil Complaint”