The founder of Tron, Justin Sun, is being summoned to respond to allegations of securities law violations by the U.S. Securities and Exchange Commission (SEC). The summons was issued by the U.S. District Court for the Southern District of New York on April 12, 2021.
Sun has been ordered to respond to the summons within 21 days by contacting the attorney for the SEC, Adam Gottlieb. Failure to respond could result in “judgment by default,” which could lead to penalties related to the alleged securities law violations.
The SEC has accused Sun of offering and selling unregistered securities in 2017 through an initial coin offering (ICO) for Tron. The SEC also alleges that Sun made false and misleading statements regarding the ICO, which raised approximately $70 million.
Sun has denied the allegations and has stated that he has “always complied with applicable laws and regulations.” He has also stated that he will “vigorously defend” himself against the SEC’s claims.
This is not the first time that Sun has faced legal issues related to Tron. In 2020, Sun was sued by several investors who claimed that he had misled them about the acquisition of BitTorrent, a peer-to-peer file sharing platform. The case was settled out of court for an undisclosed amount.
The SEC has been cracking down on ICOs in recent years, arguing that many of them are unregistered securities offerings. The agency has also been targeting companies and individuals who make false or misleading statements regarding ICOs.
The outcome of the SEC’s case against Sun could have significant implications for the cryptocurrency industry as a whole. It could set a precedent for how the SEC regulates ICOs and other cryptocurrency offerings in the future.
It remains to be seen how Sun will respond to the SEC’s summons and what the outcome of the case will be. However, it is clear that the cryptocurrency industry is facing increased scrutiny from regulators, and companies and individuals operating in the space will need to ensure that they are complying with applicable laws and regulations.