The Securities and Exchange Commission (SEC) announced Wednesday that Tron founder Justin Sun and his companies violated securities laws, accusing him of market manipulation, fraud, and airdropping unregistered securities to investors.

In addition to Sun himself, the financial watchdog said it was suing the Tron Foundation, BitTorrent, and Rainberry—three companies owned by Sun. The lawsuit claims that cryptocurrencies Tronix (TRX) and BitTorrent (BTT) are unregistered securities and that Sun manipulated them on the secondary market, as did his companies.

“Sun violated the antifraud and market manipulation provisions of the federal securities laws by orchestrating a scheme to artificially inflate the apparent trading volume of TRX in the secondary market,” the SEC claimed in a press release.

The alleged market manipulation took place between April 2018 and February 2019, when Sun directed his employees to conduct at least 600,000 TRX wash trades between two exchanges he owned, the lawsuit claims. The agency alleged that Sun walked away with illicit gains totaling $31 million from sales of the token.

TRX toppled following the SEC’s announcement, falling 11% in just over 30 minutes to $0.059 from $0.067, according to CoinGecko, which listed the token as the 17th largest cryptocurrency by market capitalization. The price of BTT also wavered, down 1.2% over the past day.

At the same time, the SEC announced it w

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Author: André Beganski

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