justin sun

The summons was related to a civil lawsuit filed by the SEC against Justin Sun and others over allegedly offering and selling TRX tokens as unregistered crypto asset securities.

A United States court has issued a summons to Tron founder Justin Sun’s Singapore address in connection to a Securities and Exchange Commission (SEC) civil case.

In an April 12 filing, the U.S. District Court for the Southern District of New York ordered Sun to respond to the summons within 21 days by contacting attorney for the SEC Adam Gottlieb. According to the court, “judgment by default will be entered” should the Tron founder fail to respond — suggesting penalties related to alleged securities law violations.

Sun’s Twitter bio showed his location as Switzerland, while ractivity on his social media accounts suggested he had recently been in Hong Kong. The Tron co-founder was reportedly born in China and claims citizenship in Grenada, while the Tron Foundation was established in Singapore in 2017.

Arrived HK pic.twitter.com/8PgKsCrDeQ

— H.E. Justin Sun 孙宇晨 (@justinsuntron) April 11, 2023

In March, the SEC filed a civil lawsuit against Sun, the Tron Foundation, the BitTorrent Foundation and Rainberry over the “orchestration of the unregistered offer and sale, manipulative trading, and unlawful touting” of Tron (TRX) as a crypto asset security. The financial regulator alleged Sun engaged in “manipulative wash trading” by helping drive public interest in TRX and BitTorrent (BTT) with the help of celebrities including Soulja Boy, Lindsay Lohan, Jake Paul, and Akon.

At the time of the SEC announcement, all celebrities allegedly involved in the scheme had settled with the regulator, with the exception of Austin Mahone and Soulja Boy. The SEC said it planned to “permanently prohibit” Sun from acting as an officer or director of any firm offering crypto securities should it prevail in the case.

Related: Judge orders YouTuber ‘BitBoy Crypto’ to appear and address alleged harassment

Sun is far from the only figure in the crypto space who has been the target of U.S. authorities in the wake of the 2022 market crash and multiple bankruptcies. In January, a bankruptcy judge issued a subpoena to Three Arrow Capital co-founder Kyle Davies. Unlike Sun’s summons, which was sent to a physical address, the U.S. court authorized a subpoena via Twitter in Davies’ case, but he had failed to respond as of the time of publication.

Magazine: Justin Sun Buys Your Company… What Do You Do?

Among the celebrities who settled with the SEC for their alleged role in promoting TRX and BTT were actress Lindsay Lohan, YouTuber Jake Paul, and singer Akon.

The United States Securities and Exchange Commission, or SEC, has called for a jury trial against Tron founder Justin Sun for the “orchestration of the unregistered offer and sale, manipulative trading, and unlawful touting of crypto asset securities.”

In a March 22 filing in U.S. District Court for the Southern District of New York, the SEC named Sun, the Tron Foundation, the BitTorrent Foundation, and Rainberry over the offer and sale of Tron (TRX) and BitTorrent (BTT), alleging the tokens were securities. The financial regulator further alleged Sun engaged in “manipulative wash trading,” driving drive public interest in the two tokens by enlisting the help of celebrities.

Among the celebrities promoting TRX and BTT were American rapper DeAndre Cortez Way, also known as Soulja Boy, Austin Mahone, actress Lindsay Lohan, YouTuber Jake Paul, and singer Aliaune Thiam, also known as Akon. Akon was also behind projects to create a ‘crypto city’ in Senegal and Uganda.

“Although the celebrities were paid to promote TRX and BTT, their touts on social media did not disclose that they had been paid or the amounts of their payments,” said the SEC complaint. “Thus, the public was misled into believing that these celebrities had unbiased interest in TRX and BTT, and were not merely paid spokespersons.”

Today we charged crypto entrepreneur Justin Sun and three of his wholly-owned companies for the unregistered offer and sale of crypto asset securities Tronix and BitTorrent.

Read more:https://t.co/4tXgKNof6Q

— U.S. Securities and Exchange Commission (@SECGov) March 22, 2023

According to the SEC, Sun’s actions in the offer and sale of TRX and BTT violated aspects of the Securities Act. The regulator alleged the Tron founder was responsible for more than 600,000 wash trades of TRX from April 2018 to February 2019, which led to Sun selling more than $31 million worth of the token.

“While we’re neutral about the technologies at issue, we’re anything but neutral when it comes to investor protection,” said SEC enforcement director Gurbir Grewal. “As 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.”

Related: Celebs who got burned endorsing crypto and those that got away with it

With the exception of Mahone and Soulja Boy, the other celebrities named in the case have settled with the SEC, agreeing to pay more than $400,000 in disgorgement, interest, and penalties. The U.S. regulator said it planned to “permanently prohibit” Sun from acting as an officer or director of any firm offering crypto securities.

In October 2022, the SEC announced it had reached a $1.2-million settlement with Kim Kardashian for touting EthereumMax (EMAX) tokens on her social media accounts. Following a similar settlement with former NBA player Paul Pierce in February, SEC chair Gary Gensler warned celebrities not to “lie to investors when you tout a security.”

Magazine: SEC sues Do Kwon, Paxos ready to litigate, SBF’s VPN