{"id":72186,"date":"2023-03-23T09:01:26","date_gmt":"2023-03-23T09:01:26","guid":{"rendered":"https:\/\/www.cryptocabaret.com\/?p=72186"},"modified":"2023-03-23T09:01:26","modified_gmt":"2023-03-23T09:01:26","slug":"sec-charges-justin-sun-tron-bittorrent-companies-with-fraud","status":"publish","type":"post","link":"https:\/\/www.cryptocabaret.com\/?p=72186","title":{"rendered":"SEC Charges Justin Sun, TRON & BitTorrent Companies With Fraud"},"content":{"rendered":"

\"justinsun1\"<\/a>After reporting on all things BitTorrent-related for the 13 years leading up to May 2018, TorrentFreak spotted something out of the ordinary<\/a>. <\/p>\n

BitTorrent Inc., the company founded by BitTorrent inventor Bram Cohen, and the owner of uTorrent, the world\u2019s most recognized torrent client, suddenly had a new name. When asked about the change, Rainberry Inc. said it was a \u201ccorporate decision\u201d not unlike the Alphabet\/Google exercise.<\/p>\n

Less than two weeks later, we were able to reveal<\/a> that TRON founder Justin Sun was planning to buy BitTorrent Inc. Less than a month after that, Sun closed the deal<\/a> with a reported offer of $140 million<\/a>.<\/p>\n

A shareholder quoted in a TechCrunch report<\/a> revealed that one of Sun\u2019s aims was to use the BitTorrent acquisition to \u201clegitimize\u201d TRON\u2019s business. <\/p>\n

According to a Securities and Exchange Commission announcement published a few hours ago, the plan failed in at least one key area. Most likely, many, many more.<\/p>\n

Fraud: SEC Charges Justin Sun and Three Wholly-Owned Companies<\/h2>\n

Claims that the SEC had already opened an investigation into Sun\u2019s business activities have been around for a long time. An extraordinary article<\/a> written by Christopher Harland-Dunaway and published by The Verge last year left very little doubt.<\/p>\n

In an announcement Wednesday, the SEC revealed charges against Justin Sun and three of his wholly-owned companies \u2013 Tron Foundation Limited, BitTorrent Foundation Ltd., and Rainberry Inc. (formerly BitTorrent Inc.) \u2013 for the unregistered offer and sale of crypto asset securities Tronix (TRX) and BitTorrent (BTT).<\/p>\n

Sun and his companies were further charged with fraudulently manipulating the secondary market for TRX through extensive wash trading, described by the SEC as \u201csimultaneous or near-simultaneous purchase and sale of a security to make it appear actively traded without an actual change in beneficial ownership.\u201d<\/p>\n

Alleged Crypto-Shill Celebrities<\/h2>\n

The SEC also charged eight celebrities for promoting TRX and\/or BTT without disclosing they were being paid to do so. <\/p>\n

Actress Lindsay Lohan, YouTuber\/Boxer Jake Paul, DeAndre Cortez Way (Soulja Boy), and singer\/songwriter Austin Mahone, are joined by porn actress Michele Mason (aka Kendra Lust), Miles Parks McCollum (Lil Yachty), Shaffer Smith (Ne-Yo) and Aliaune Thiam (Akon) on the SEC\u2019s list.<\/p>\n<\/p>\n

Sun\u2019s personal promotion site before it went offline (hejustinsun.com<\/a>)\"crypto-diplomat\"<\/a><\/em><\/center><\/p>\n

The SEC\u2019s complaint alleges that Sun and his companies sold TRX and BTT as investments via unregistered \u201cbounty programs\u201d that saw partners promote the tokens on social media while recruiting others to join Tron-affiliated Telegram and Discord channels.<\/p>\n

Sun, BitTorrent Foundation, and Rainberry reportedly sold BTT in unregistered monthly airdrops to investors who purchased and held TRX in Tron wallets or on other crypto trading platforms. The SEC says that every offer and sale violated Section 5 of the Securities Act<\/a>.<\/p>\n

Fraud and Market Manipulation<\/h2>\n

The SEC alleges that Sun was also the architect of a scheme that sought to artificially inflate the volume of TRX on the secondary market. <\/p>\n

During a 10-month period 2018\/2019, Sun allegedly directed his employees \u201cto engage in more than 600,000 wash trades of TRX between two crypto asset trading platform accounts [Sun] controlled, with between 4.5 million and 7.4 million TRX wash traded daily.\u201d <\/p>\n<\/p>\n

Sun\u2019s personal promotion site today (hejustinsun.com<\/a>)\"messeduphomepage\"<\/a><\/em><\/center><\/p>\n

Sun is said to have supplied a significant amount of TRX to facilitate the scheme while also selling TRX into the secondary market himself. These \u201cillegal, unregistered offers and sales\u201d reportedly generated $31 million.<\/p>\n

Sun\u2019s Stunts Slammed by SEC<\/h2>\n

\u201cWhile we\u2019re neutral about the technologies at issue, we\u2019re anything but neutral when it comes to investor protection,\u201d said Gurbir S. Grewal, Director of the SEC\u2019s Division of Enforcement. <\/p>\n

\u201cAs alleged in the complaint, Sun and others used an age-old playbook to mislead and harm investors by first offering securities without complying with registration and disclosure requirements and then manipulating the market for those very securities.<\/p>\n

\u201cAt 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.\u201d<\/p>\n

According to the SEC<\/a>, six of those celebrities have already paid their way out. Lohan, Paul, Lust, McCollum, Smith, and Thiam agreed to hand over a combined $400,000 in settlements for their alleged roles in a magic bean business we called out almost four years ago<\/a>.<\/p>\n

From: TF<\/a>, for the latest news on copyright battles, piracy and more.<\/p>\n

Powered by WPeMatico<\/a><\/small><\/p>\n","protected":false},"excerpt":{"rendered":"

After reporting on all things BitTorrent-related for the 13 years leading up to May 2018, TorrentFreak spotted something out of the ordinary. BitTorrent Inc., the company founded by BitTorrent inventor Bram Cohen, and the owner of uTorrent, the world\u2019s most recognized torrent client, suddenly had a new name. When asked about the change, Rainberry Inc. […]<\/p>\n","protected":false},"author":2,"featured_media":72187,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[308],"tags":[],"class_list":["post-72186","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-torrent"],"_links":{"self":[{"href":"https:\/\/www.cryptocabaret.com\/index.php?rest_route=\/wp\/v2\/posts\/72186","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.cryptocabaret.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.cryptocabaret.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.cryptocabaret.com\/index.php?rest_route=\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.cryptocabaret.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=72186"}],"version-history":[{"count":0,"href":"https:\/\/www.cryptocabaret.com\/index.php?rest_route=\/wp\/v2\/posts\/72186\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.cryptocabaret.com\/index.php?rest_route=\/wp\/v2\/media\/72187"}],"wp:attachment":[{"href":"https:\/\/www.cryptocabaret.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=72186"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.cryptocabaret.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=72186"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.cryptocabaret.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=72186"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}