Justin Sun, Tron Foundation Limited, BitTorrent Foundation Ltd., Rainberry, Inc., Austin Mahone, and Deandre Cortez Way
U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 25803 / August 7, 2023
Securities and Exchange Commission v. Justin Sun, Tron Foundation Limited, BitTorrent Foundation Ltd., Rainberry, Inc., Austin Mahone, and Deandre Cortez Way, No. 1:23-cv-02433 (S.D.N.Y. filed Mar. 22, 2023)
SEC Obtains Consent Judgment Against Celebrity Charged with Illegally Touting Crypto Asset Securities for Crypto Entrepreneur Justin Sun
On August 4, 2023, the Securities and Exchange Commission obtained a final judgment resolving the SEC’s action against defendant Austin Mahone, who the SEC previously charged with illegally touting crypto asset securities Tronix (TRX) and BitTorrent (BTT) without disclosing his compensation.
The SEC’s complaint, filed March 22, 2023 in the United States District Court for the Southern District of New York, alleged that crypto entrepreneur Justin Sun and three of his wholly-owned companies—Tron Foundation Limited, BitTorrent Foundation Ltd., and Rainberry Inc. (formerly BitTorrent)—engaged in the unregistered offer and sale of TRX and BTT, and fraudulently manipulated the secondary market for these securities through extensive wash trading. The SEC also alleged that Sun and his companies orchestrated a campaign to pay influential celebrities—including Mahone and codefendant DeAndre Cortez Way (a/k/a Soulja Boy)—to promote TRX and BTT on social media without disclosing the fact that they were being paid to do so.
The final judgment, entered with Mahone’s consent, permanently enjoins him from violating the anti-touting provisions of Section 17(b) of the Securities Act of 1933, imposes a three-year conduct-based injunction precluding any compensated touting of crypto asset securities, and orders him to pay $7,507 disgorgement plus $682 prejudgment interest and a civil penalty of $37,535.
The SEC’s ongoing litigation against Justin Sun, his companies, and DeAndre Cortez Way is being led by Timothy Halloran and Adam B. Gottlieb, under the supervision of Melissa Armstrong.
Last Reviewed or Updated: Aug. 23, 2023