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SEC Gives Justin Sun 21 Days To Respond to Market Manipulation Lawsuit
Justin Sun will reportedly suffer a “judgment by default” in favor of the SEC unless he responds to the summons within 21 days.
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According to a report from Thursday, April 13th, the Securities and Exchange Commission issued a summons giving 21 days to Justin Sun to respond to a lawsuit filed against him last month. Similar summons have allegedly been issued to Soulja Boy and Austin Mahone, celebrities targeted in the same SEC action.
Justin Sun Has 21 Days to Respond to the Recent SEC Complaint
This Thursday, the Securities and Exchange Commission issued a summons to Justin Sun giving him 21 days to respond to a lawsuit filed on March 22nd. If the Tron DAO founder fails to respond within the allotted time, he may face a judgment by default granting the SEC’s request indicated in the complaint.
Deandre Cortez Way, better known as Soulja Boy, and Austin Mahone, a well-known YouTuber—the celebrities also involved in the case—were allegedly issued a similar summons. Without offering additional context, Justin Sun tweeted the number “4” on Thursday afternoon, likely in response to the alleged SEC summons.
The number has been introduced early in 2023 by Changpeng Zhao, the CEO of Binance, as a response to negative news and a way to imply they are not correct. This is the second time Sun responded to negative news or rumors about him using the number “4”. On April 11th, an unverified, and quickly debunked rumor alleging that he has been arrested in Hong Kong.
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The SEC Complaint Against Sun, Mahone, and Soulja Boy
On March 22nd, the Securities and Exchange Commission unveiled a complaint targeting Justin Sun and eight celebrities for “touting” Tronix (TRX) and BitTorrent (BTT)—termed “crypto asset securities” by the SEC. The lawsuit also alleged that Justin Sun engaged in severe market manipulation, primarily through “extensive wash trading”.
Most of the celebrities targeted by the complaint—Lindsay Lohan, Jake Paul, Michele Mason (Kendra Lust), Miles Parks McCollum (Lil Yachty), Shaffer Smith (Ne-Yo), and Aliaune Thiam (Akon)—agreed to settle with the Commission and paid $400,000 without denying or admitting wrongdoing. Soulja Boy, and Austin Mahone—like Justin Sun—so far refused to settle with the SEC.
Recent months have brought an uptick in high-profile regulatory activity targeting both major companies and notables in the industry. In February, the SEC revealed a $30 million settlement with Kraken forcing it to terminate its staking service. In late March, both Binance and its CEO, Changpeng Zhao, were sued by the CFTC.
Do you think Justin Sun will answer the SEC’s summons before the deadline expires? Let us know in the comments below.
Tim Fries
Tim Fries is the cofounder of The Tokenist. He has a B. Sc. in Mechanical Engineering from the University of Michigan, and an MBA from the University of Chicago Booth School of Business. Tim served as a Senior Associate on the investment team at RW Baird's US Private Equity division, and is also the co-founder of Protective Technologies Capital, an investment firm specializing in sensing, protection and control solutions.
