By
Temitope Olatunji
April 18th, 2024
The SEC says the TRON founder and the other two accused have 21 days to answer its summons or incur further punitive action.
The Securities and Exchange Commission (SEC) has issued summons to TRON founder Justin Sun and a few other celebrities over the TRX token. According to reports, the securities regulator wants to hear from Sun, American rapper Soulja Boy, and YouTube sensation Austin Mahone following its civil complaint.
Last month, the SEC accused several celebrities, including the trio, of involvement in issuing unregistered tokens. The Commission alleged that Sun, Soulja Boy, Mahone, Lindsay Lohan, Jake Paul, Kendra Lust, Lil Yachty, Akon, and Ne-Yo promoted TRX and BitTorrent token (BTT). Furthermore, the SEC claimed that the celebrities touted the digital assets without disclosing they were paid.
Per an agency release in March, most of the accused stars reportedly settled the market manipulation charges with the SEC. The celebrities who agreed to a settlement forfeited their earnings without admitting or denying the SEC’s findings. However, Sun, Soulja Boy (real name DeAndre Cortez Way), and Mahone remain the only holdouts. The trio has 21 days to respond to the SEC’s summons or risk incurring a judgment by default “for the relief demanded in the complaint.”
Other Development from SEC Summons against TRON Founder
In addition to the summons, the SEC petitioned a court to bar TRON founder Sun and his companies from offering securities – including digital assets. The regulatory agency also wants Sun and his associates to forfeit their proceeds plus interest and pay civil penalties. In addition, the SEC seeks an injunction against Sun that prevents him from serving in any securities-issuing company. The embattled crypto entrepreneur previously served as Permanent Representative of Grenada to the World Trade Organization in Geneva.
Beyond Sun, the SEC calls for a ban on Soulja Boy and Mahone. The commission wants to prevent them from receiving money for future crypto endorsements. In addition, the agency also wants the American duo to pay their own penalties.
Sun Remains Dismissive of SEC Complaint as “Lacking Merit”
Despite the SEC’s allegations of TRX trading volume manipulation, unregistered securities sales, and celebrity kickbacks, Sun remains dismissive. At the time the regulator filed the complaint on March 22nd, the crypto entrepreneur responded on Twitter, saying:
“The SEC’s civil complaint is just the latest example of actions it has taken against well-known players in the blockchain and crypto space. We believe the complaint lacks merit, and in the meantime, will continue building the most decentralized financial system.”
Furthermore, Sun pointed out that the SEC’s crypto regulatory framework is still quite inadequate and needs further development. As a result, the TRON founder offered to “collaborate with governments and regulatory bodies globally that are dedicated to establishing transparent guidelines.” According to Sun, these guidelines would pose proper oversight over the digital assets space. He also believes that well-tailored guidelines will maximize the importance of crypto’s role.