Justin Sun, the founder of Tron, has reportedly received a summons to respond to the Securities and Exchange Commission (SEC) lawsuit filed against him on March 22 in the Southern District of New York. The lawsuit alleges that Sun, through his companies Tron Foundation, BitTorrent Foundation, and Rainberry Incorporated, sold and airdropped unregistered securities, committed fraud and market manipulation, and manipulated the market for TRX to create the appearance of legitimate investor interest.

According to SEC, Sun has 21 days to respond to the summons, which was mailed to two locations in Singapore, including his residential and office address. Failure to respond in time could result in the court ruling in favor of the plaintiff.

The SEC lawsuit also named two musicians, Austin Mahone and DeAndre Cortez Way, known as Soulja Boy, who were allegedly involved in promoting the two cryptocurrencies without disclosing their compensation.

While several celebrities named in the lawsuit have settled their respective charges, Mahone and Soulja Boy were named in the latest summons. Bloomberg had earlier reported that Sun was the majority shareholder of Huobi Global, but he denied being the owner of a roughly 60 percent stake.

In a statement on March 22, SEC chairman Gary Gensler described Sun as not just targeting US investors but also coordinating wash trading to create a misleading impression of active trading in TRX. He added that 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.

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This article was republished from azcoinnews.com

Justin Sun, the founder of Tron, has responded to the U.S. Securities and Exchange Commission’s (SEC) legal action against him.

Sun has taken to Twitter to defend himself and the Tron Foundation, emphasizing that the SEC’s complaint is a “civil complaint” that lacks merit.

Sun has stated that the Tron Foundation believes that the complaint lacks merit and that they will continue to build the most decentralized financial system in the meantime. He acknowledges that the SEC’s regulatory framework for digital assets is still in its early stages and requires further development. Sun has expressed his eagerness to collaborate with governments and regulatory bodies globally to establish transparent guidelines for regulating and working with the cryptocurrency industry, given its important role.

The SEC’s legal action against Sun stems from his alleged involvement in the unregistered offer and sale of two crypto asset securities known as “TRX” and “BTT.” Sun is accused of working through several companies that he owns and controls, including Tron Foundation Limited, BitTorrent Foundation Ltd., and Rainberry, Inc., to distribute billions of TRX and BTT to the public and create active secondary markets for trading them.

The SEC’s press release on Wednesday outlined allegations of selling and distributing unregistered securities, fraud, and market manipulation. The news has had an immediate impact on the market, with Tron’s TRX falling over 10% following the announcement.

Sun’s response highlights the need for regulatory bodies to collaborate with the cryptocurrency industry to establish transparent guidelines and regulations that can help protect investors and promote the growth of the industry. With many countries introducing new regulations to govern the space, it remains to be seen how the legal action against Sun will play out. Nonetheless, the Tron Foundation is committed to continuing its work in building a decentralized financial system.

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This article was republished from acoinnews.com