Direct from the desk of Dane Williams.
While the SEC's allegations may come as news to some, everyone in the crypto community was aware of TRON founder Justin Sun's involvement in wash trading and market manipulation.
Well slap my arse and call me Sally.
In today’s edition of the crypto casino news, the US Securities and Exchange Commission (SEC) has FINALLY filed a lawsuit against the controversial founder of TRON, Justin Sun.
The SEC alleges that Sun engaged in securities fraud and market manipulation by selling and promoting unregistered crypto assets.
These namely being TRON's TRX and BitTorrent's BTT tokens.
The allegations include the "extensive wash trading" scheme that artificially inflated TRX's trading volume and literally everyone in the crypto community knew and was okay with, happening.
Yes CoinDesk and all the aggregator sites like CoinGecko, I’m looking at you.
Either way, this lawsuit marks a significant move by a regulatory agency and is worth a deeper look.
Market manipulation and wash trading in TRON (TRX)
It comes as no surprise that Justin Sun and his scam tokens are accused of market manipulation.
In what is being described as an "extensive wash trading" program to artificially inflate the trading volume of TRON, this is big.
For years the crypto community has been aware of Sun's shady practices and the questionable legitimacy of TRON's reported trading volumes.
Personally, it’s been really disappointing to see that our own crypto media, including prominent industry publications and influencers (cough), have continued to give Sun a platform to spread his false claims and pump his own shit.
What's been even more concerning is the potential risks that market manipulation poses to investors in the cryptocurrency industry.
False trading volumes can obviously create a false sense of demand and price stability, leading to misguided investments by the n00b masses.
Despite this, sites like CoinGecko and DappRadar are still ranking TRON highly based on fraudulent data, which only perpetuates the cycle of deception.
Ultimately harming the overall integrity of the crypto market that they have a financial incentive to legitimise.
Sigh.
It's time for the industry to hold itself accountable and take a stronger stance against those who engage in fraudulent practices.
Hopefully that’s what comes of this.
Allegations of selling unregistered securities
As I said above, the SEC's allegations that Justin Sun and his companies sold unregistered securities in the form of TRON (TRX) may not come as a surprise to many in the cryptocurrency community.
But this development could very well have significant implications for the industry as a whole.
One of the main concerns is the legal status of ALL cryptocurrencies being seen as securities.
At least in the United States.
While some argue that they are not securities, the SEC has taken a different position and is obviously starting with the known dogshit as it begins a crackdown on projects that it deems to be in violation of securities laws.
If the SEC's position is upheld, it could lead to more enforcement actions and greater regulatory scrutiny of the cryptocurrency space.
Nobody wants this.
It's also possible that this could lead to more community hard forks and a more decentralised ownership structure like we see here on Hive.
If this is the case, the game theory of how it could play out is tantalising.
Time will tell.
Justin Sun is a scammer
It just burns me so much that literally EVERYONE in crypto knew that Justin Sun is a scammer and was happy to play along with his shit.
But like Sun - Permanent Representative of Grenada to the World Trade Organisation and a man that literally calls himself “his excellency” - gives a shit about the SEC at this point.
Being accused by some shitty US regulator of wash trading on TRON is honestly something he would laugh at.
However, there’s no doubt that the SEC's allegations against Justin Sun could have far-reaching consequences for the cryptocurrency industry as a whole.
It won’t matter to Sun.
But there will be plenty of people and projects that the flow on effects that are coming, will matter to
Things are about to get seriously juicy in the space so button up that rain jacket.
Best of probabilities to you.