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The Securities and Exchange Commission charged crypto entrepreneur Justin Sun, and three of his companies including digital asset network company Tron Foundation Limited, for the unregistered offer and sale of two “crypto asset securities,” while also accusing eight celebrities of violating securities laws in touting related tokens.

Sun and his companies — Tron Foundation Limited, BitTorrent Foundation Ltd., and Rainberry Inc. —  allegedly offered and sold Tronix and BitTorrent as investments “through multiple unregistered ‘bounty programs.’” Those cryptocurrencies also go by TRX and BTT. TRX is the fourteenth largest crypto by market capitalization.  

The agency also charged eight celebrities for “illegally touting” TRX and BTT without disclosing that they were being paid. Those celebrities include actress Lindsay Lohan, media personality Jake Paul, rapper DeAndre Cortez Way or Soulja Boy, singer Austin Mahone and four others.  

The SEC said the celebrities, except for Cortez Way and Mahone, agreed to pay $400,000 in disgorgement, interest and penalties to settle the charges without admitting or denying the SEC’s findings.  

Wash trades

This is not the first time the SEC has charged celebrities for similar charges. The SEC charged Kim Kardashian for unlawfully touting EthereumMax’s token last year. 

The SEC is also accusing Tron-founder Sun of violating federal securities laws after he allegedly conducted a scheme to artificially inflate the trading volume of TRX in the secondary market.  

The SEC said Sun told his employees to “engage in more than 600,000 wash trades of TRX” with about 4.5 million and 7.4 million TRX wash traded daily.  

“As alleged, Sun and his companies not only targeted U.S. investors in their unregistered offers and sales, generating millions in illegal proceeds at the expense of investors, but they also coordinated wash trading on an unregistered trading platform to create the misleading appearance of active trading in TRX,” SEC Chair Gary Gensler said in a statement. “Sun further induced investors to purchase TRX and BTT by orchestrating a promotional campaign in which he and his celebrity promoters hid the fact that the celebrities were paid for their tweets.” 

 

© 2023 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

The U.S. Securities and Exchange Commission sued Justin Sun Wednesday on allegations of selling and airdropping unregistered securities, fraud and market manipulation.

The holding company needs access to the FDIC-locked funds in order to pay back its creditors and support its two external operations, says Kleinberg, Kaplan partner, Dov Kleiner.

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Coinbase did not give a specific reason for terminating the rewards.

Recent bank failures had market participants questioning if the U.S. central bank would follow through with its previous intention to further tighten monetary policy.

Conflicting data creates the question of how the Fed will react to both rising inflation and failing banks – and whether bitcoin will be a lifeboat.

In advance of the Arbitrum airdrop, Coinbase tweeted that it will support trading for the governance token on March 23.

“Once sufficient supply of this asset is established, we will announce the impending launch of trading on our ARB-USD pair in phases,” Coinbase said, adding that support may be restricted in some jurisdictions. Coinbase warned users to avoid sending the token to a network other than Arbitrum, as it will result in the loss of tokens.

Arbitrum will trade on Coinbase with the “experimental asset label” that the exchange assigns to new assets or those with low performance relative to the trading volume of other supported trading pairs.

Coinbase noted that it is aware of an issue in which “some users may see a delay in depositing on the Arbitrum network” and said its team is working to resolve the issue. It will update the site’s status page once the issue is resolved, Coinbase said.  

The long-awaited airdrop of ARB will see 11.6% of the total supply fall into the hands of users, while 1.1% goes to DAOs on the Layer 2 platform. The lion’s share of ARB, some 42.8%, is earmarked for the Arbitrum Foundation.

© 2023 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

Banking enforcement targeting legal crypto businesses appears to violate the FDIC’s mandate. It may also be amplifying financial contagion.

Bitcoin continues to trade higher into the U.S. Federal Reserve’s latest interest rate decision. 

The leading cryptocurrency by market cap was trading at around $28,650, up about 1.7% in the past few hours, according to TradingView data. The U.S. central bank is expected to increase rates by 25 basis points.

“The consensus has shifted to what we posted last week, that no hike, or worse, a surprise cut, will ironically signal more panic for markets,” digital asset investment firm QCP Capital wrote in a market update on Tuesday. The policy committee’s decision is “crucial for markets as a pivot.” 

“Bitcoin and gold rallied exponentially partly because of the large Fed liquidity injection, but more so because of the lack of resolve amongst Fed policymakers,” the note read.

The decision is slated for 2 p.m. EDT today. 

© 2023 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.