The charges levied against Ne-Yo, Lil’ Yachty and others are part of a larger investigation revolving around entrepreneur Justin Sun and his three companies, Tron Foundation Limited, BitTorrent Foundation Ltd. and Rainberry Inc. According to NPR, each of the companies has been accused of the “unregistered offer and sale of crypto asset securities and manipulating the secondary market by wash trading.”
“This case demonstrates again the high-risk investors face when crypto asset securities are offered and sold without proper disclosure,” SEC Chairperson Gary Gensler said.
“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. 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.”
