The US Securities and Exchange Commission (SEC) has charged Tron founder Justin Sun and three of his companies with conducting an unregistered securities offering in the form of Tron (TRX) and BitTorrent (BTT) tokens.
According to the regulator, Sun and its wholly owned Tron Foundation, BitTorrent Foundation and Rainberry (formerly BitTorrent) manipulated the secondary market for TRX through "wash trading."
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According to the release, the defendants involved several celebrities in the scheme to advertise the assets for an undisclosed fee. In this regard, the SEC has filed charges of unlawful promotion of TRX and/or BTT.
The watchdog has filed a civil lawsuit in the Southern District of New York.
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For his part, Justin Sun has called the allegations unfounded and noted that the SEC's regulatory framework for digital assets is "still in its infancy."
The price of TRX has seen a 7% drop over the past 24 hours, currently trading around $0.06.