Key takeaways:
- A U.S. federal court has issued a summons to Justin Sun, the creator of the Tron network and a portion owner of the Huobi cryptocurrency exchange.
- Justin Sun has a 21-day response period. He appears to have labelled the latest advancement as FUD.
- Sun is charged with trading BitTorrent (BTT) and Tronix (TRX) without properly registering them as securities.
A U.S. district court filed summons to Justin Sun, the creator of the Tron network and a co-owner of the Huobi cryptocurrency exchange, who now has 21 days to reply to a case brought by the Securities and Exchange Commission (SEC).
The summons have reportedly been delivered to two places connected to Sun. The first is an office space in Suntec Tower Two at 9 Temasek Boulevard, while the second is also in Singapore’s central district at 8 Lady Hill Road in the Tanglin neighbourhood.
Sun allegedly devised “a scheme to pay celebrities to promote TRX and BTT without revealing their compensation,” according to the agency.
Along with Sun, rapper Soulja Boy and YouTube musician Austin Mahone have also been called in response to the agency’s filing of a civil case last month regarding tokens issued by Tron and the file-sharing service BitTorrent.
The SEC requested that the court impose a permanent injunction against Sun and his businesses, prohibiting them from ever again issuing securities, including digital assets, forfeit their profits plus interest, and pay civil fines. As is customary in charges of this nature, Sun was also permanently barred from holding any position of authority within any corporation that issues securities.
If the founder of Tron doesn’t answer, the court says “judgement by default will be entered,” implying fines for accused securities law crimes. This might have major repercussions for Sun because he would be held accountable for the SEC’s accusations without having the chance to defend himself or offer evidence in his favour.
This might have major repercussions for Sun because he would be held accountable for the SEC’s accusations without having the chance to defend himself or offer evidence in his favour.
As regulators and industry leaders continue to disagree on what constitutes a “security,” the SEC and other agencies have begun harshly prosecuting cryptocurrency developers for securities violations this year. The SEC brought similar charges against Kim Kardashian for endorsing Ethereum Max last year.
