According to U.S. court documents, the U.S. Securities and Exchange Commission (SEC) has formally sued Justin Sun, the founder of Tron and member of Huobi's global advisory board, accusing him of illegal securities sales, fraud and market manipulation.

It is reported that the SEC stated in a press release that it is suing Justin Sun, the Tron Foundation, the BitTorrent Foundation and BitTorrent (now known as Rainberry) for selling tronix (TRX) and BitTorrent (BTT) tokens, describing them as unregistered crypto asset securities, and further accusing Justin Sun of fraudulently manipulating the secondary market for TRX.

The SEC stated that Justin Sun attempted to artificially increase TRX trading volume through a virtual trading (wash sale) scheme in which he had his employees conduct more than 600,000 virtual TRX transactions between accounts on two crypto asset trading platforms under his control. Approximately 4.5 million to 7.4 million TRX were traded through these wash sales every day, and all the assets (TRX) used in the illegal transactions were provided by Justin Sun himself.

At the same time, the SEC also filed charges against celebrity supporters such as Internet celebrity Jake Paul, film and television actor Lindsey Lohan, and rapper Soulja Boy.

The SEC said: "This case once again shows that the issuance and sale of crypto-asset securities without proper disclosure can pose high risks to investors. Sun Yuchen allegedly induced investors to buy TRX and BTT tokens by planning a publicity campaign and concealing the fact that celebrities were paid for their tweets." (CoinDesk)