The Securities and Exchange Commission on Wednesday charged cryptocurrency entrepreneur Justin Sun and three of his companies for fraud and other securities law violations . The regulator charged Sun, Tron Foundation, BitTorrent Foundation, and Rainberry (formerly BitTorrent) for the unregistered offer and sale of cryptos Tronix ( TRX-USD ) and BitTorrent ( BTT-USD ). The news sent Tronix ( TRX-USD ) sliding 13% , while BitTorrent ( BTT-USD ) was down 2% . The SEC charged eight celebrities for illegal touting of Sun's cryptos - actress Lindsay Lohan, YouTube star Jake Paul, rappers Soulja Boy and Lil Yachty, singers Ne-Yo, Akon and Austin Mahone, as well as adult film star Kendra Lust. The SEC also charged the parties for "fraudulently manipulating the secondary market for TRX through extensive wash trading" and for roping in celebrities to tout Tronix ( TRX-USD ) and BitTorrent ( BTT-USD ) without disclosing their compensation. Wash trading refers to an illegal practice of simultaneous/near-simultaneous trading of a security to make it appear actively traded without any change in beneficial ownership. "Sun and others used an age-old playbook to mislead investors by first offering securities without complying with registration and disclosure requirements and then manipulating the market for those securities," said Gurbir Grewal, director of the SEC's Division of Enforcement. "At the same time, Sun paid celebrities to tout the unregistered offerings, while specifically directing that they not disclose their compensation." With the exception of Soulja Boy and Mahone, the celebrities agreed to pay more than $400K combined in disgorgement, interest, and penalties to settle the charges. "While we're neutral about the technologies at issue, we're anything but neutral when it comes to investor protection," Grewal warned. Earlier, Sen. Ted Cruz introduced a bill to block the Federal Reserve from creating a central bank digital currency .
