Justin Sun and his companies have found themselves on the receiving end of an SEC dragnet in a move sending shockwaves through the cryptocurrency world.
Justin Sun was strongly involved in allegations announced earlier this year which involved unregistered offers and sales of crypto asset securities Tronix (TRX) and BitTorrent Token (BTT). The charges included fraudulent manipulation of the secondary TRX market through extensive wash trading.
Institutionalized investors are allegedly sending billions of dollars to TrueUSD, which suddenly is having catastrophic financial problems, with the secret owner Justin Sun being sued by the SEC for fraud and market manipulation, to then send them to Binance, which is also being… pic.twitter.com/d5mw8Y4gt5
— Things Sam is Freaking Out About (@Bitfinexed) June 21, 2023
Significantly, wash trading represents the act of artificially inflating trading volume. It’s a ploy where security is bought and sold almost simultaneously to give the illusion of robust trading activity without any real change in beneficial ownership.
Justin Sun’s alleged manipulation and the role of celebrities.
In Sun’s case, the SEC alleged that he masterminded this scheme to pay celebrities to endorse TRX and BTT. Notably, these celebrities failed to disclose their compensation for these promotions.
Moreover, eight renowned celebrities, including Austin Mahone, Lindsay Lohan, Jake Paul, and Soulja Boy (DeAndre Cortez Way), were found guilty of touting TRX and BTT illegally. Except for Soulja Boy and Austin Mahone, the remaining celebrities agreed to settle the charges without admitting or denying the SEC’s findings.
Justin Sun faces fresh accusations over covert TUSD purchases.
In a twist of events, Sun’s troubles did not end with the SEC’s earlier suit as he now faces another lawsuit by one of Archblock’s founders. According to the lawsuit filed by one of Rafael Cosman, Stephen Kade, or Tory Reiss (co-founders of Archblock), Sun is alleged to have to purchased the stablecoin TrueUSD (TUSD) through clandestine means.
This accusation points to Sun’s concealed accumulation of TUSD through various entities and individuals, further shrouding his activities in mystery. Yet, Sun vehemently denies these allegations, despite the mounting suspicion surrounding his alleged ownership of TUSD.
Archblock Founder Claims Justin Sun Was Secret TUSD Acquirer in Lawsuit (Not exactly a shocker) pic.twitter.com/ybTPmSOmtk
— db (@tier10k) July 17, 2023
Interestingly, this news has barely caused a ripple effect in the crypto community. Persistent rumors about Sun’s practices have somewhat desensitized the crypto world to such revelations. Hence, his insistence on keeping these acquisitions secret only compounds the intrigue.
On the other hand, TrueUSD, a dollar-pegged stablecoin launched by the Trust Token platform in 2018 showed no significant price fluctuations following this revelation as it continued to maintain its peg against the United States Dollar. Aside from the stablecoin, the native asset behind Sun’s innovation TRON, TRX, has not responded negatively to the news. As of July 18, TRX is up by 46% year-to-date (YTD), data from crypto price tracker CoinMarketCap showed.
Consequently, the recent lawsuit by Archblock intensifies concerns about Sun’s transparency and integrity within the crypto community. It casts a looming shadow over his influence on the value of TUSD and other associated markets.
All charges must be treated diligently until all evidence is thoroughly scrutinized. The cryptocurrency sector is known for its openness and accountability, and this occurrence serves as a stark reminder of the significance of keeping these standards.
These charges could drastically alter Sun’s standing within the cryptocurrency community if proven. As this tale unfolds, one can’t help but wonder what effect this dispute will have on his reputation and the greater crypto sector. Finally, these incidents illustrate the continuous need for tight regulatory compliance and transparency in the fast-growing realm of digital assets.