2025 SEC Lawsuit Targets Tron Founder Justin Sun, Lindsay Lohan & Celebrities Over Crypto Promotions - Key Details & Implications

The U.S. Securities and Exchange Commission (SEC) has filed a high-profile lawsuit in 2024 against prominent figures in the crypto space, including Tron founder Justin Sun, actress Lindsay Lohan, rapper Lil Yachty, and YouTuber-turned-boxer Jake Paul, accusing them of illegal promotion and sales of unregistered crypto securities.

Key Highlights

• Justin Sun is identified as the central figure orchestrating the promotion of Tron-related crypto assets.
• The SEC alleges that TRX and BTT tokens are unregistered securities, with Sun engaging in extensive wash trading to manipulate market activity.
• The case intensifies ongoing debates about the classification of cryptocurrencies as securities under federal law.

The complaint, filed in the Southern District of New York, charges Sun and his affiliated companies with the unregistered offering and sale of crypto securities, alongside accusations of market manipulation through wash trading—a practice where securities are repeatedly bought and sold to create misleading trading volume.

The SEC claims Sun orchestrated efforts to artificially inflate the trading volumes of Tronix (TRX) and BitTorrent (BTT) tokens, deceiving investors about their market demand and liquidity.

Furthermore, the SEC has implicated eight celebrities, including Lindsay Lohan, Akon, Lil Yachty, and Jake Paul, alleging they were paid by Sun to promote TRX and BTT without disclosing their compensation, violating securities laws. Six of these celebrities have settled charges related to these undisclosed promotions.

SEC Chair Gary Gensler stated, "Sun and his companies targeted U.S. investors with unregistered offerings, generating millions in illicit proceeds while manipulating market activity and hiding paid promotions by celebrity endorsers."

This lawsuit echoes prior SEC actions against celebrities like Kim Kardashian, who settled for $1.26 million in 2022 over similar allegations related to EthereumMAX token promotions.

The SEC maintains that Sun’s firms conducted over 600,000 wash trades involving TRX and that monthly BTT token airdrops constituted unregistered securities sales, violating the Securities Act.

This case parallels the ongoing SEC v. Ripple lawsuit, which centers on whether XRP tokens are securities, highlighting the broader regulatory challenges facing the crypto industry. Gensler has reiterated that most cryptocurrencies likely fall under SEC jurisdiction, a stance contested by many crypto companies.

"This lawsuit underscores the significant risks investors face when crypto securities are marketed and sold without transparent disclosure," Gensler added.

For news tips, contact Investopedia reporters at tips@investopedia.com.

Discover engaging topics and analytical content in Cryptocurrency News as of 28-03-2023. The article titled " 2025 SEC Lawsuit Targets Tron Founder Justin Sun, Lindsay Lohan & Celebrities Over Crypto Promotions - Key Details & Implications " provides new insights and practical guidance in the Cryptocurrency News field. Each topic is meticulously analyzed to deliver actionable information to readers.

The topic " 2025 SEC Lawsuit Targets Tron Founder Justin Sun, Lindsay Lohan & Celebrities Over Crypto Promotions - Key Details & Implications " helps you make smarter decisions within the Cryptocurrency News category. All topics on our website are unique and offer valuable content for our audience.