US district court issues summons to crypto mogul Justin Sun in Singapore

SINGAPORE – Cryptocurrency mogul Justin Sun was on Thursday issued a summons from a United States District Court, and has been given 21 days to respond in relation to the lawsuit filed by the Securities and Exchange Commission (SEC).

The document seen by The Straits Times said failure to respond in time would result in the court ruling in favour of the plaintiff.

The summons was addressed to two locations - 8 Lady Hill Road, a Good Class Bungalow in the Tanglin area, as well as an office space in 9 Temasek Boulevard, Suntec Tower Two.

The 32-year-old China national, who founded Tron Foundation and BitTorrent Foundation in Singapore, has come under scrutiny by the SEC, which sued him on March 22 following allegations of selling and airdropping unregistered securities, fraud and market manipulation.

The lawsuit includes Mr Sun’s three wholly-owned companies - Tron Foundation, BitTorrent Foundation and Rainberry Incorporated, as well as two musicians - Austin Mahone and DeAndre Cortez Way, better known as Soulja Boy.

The SEC alleged that he had “engineered the offer and sale of two crypto assets called TRX and BTT” through the companies.

These assets were labelled as securities and required registration with the SEC, but it is alleged that this was not carried out.

It is also alleged that Mr Sun had manipulated the market for TRX to “create the artificial appearance of legitimate investor interest and keep (its) price afloat”.

Hundreds of thousands of trades were said to have been carried out between accounts that he controlled.

The lawsuit also named six other celebrities, musicians Lil Yachty, Ne-Yo and Akon; actors Lindsay Lohan and Kendra Lust; and social media personality Jake Paul for illegally touting the two cryptocurrencies without disclosing that they were being compensated and by how much.

The majority of them have already settled their respective charges. Only Mahone and Soulja Boy were named in the latest summons.

Bloomberg had earlier in the year reported that Mr Sun was the majority shareholder of Huobi Global, but he denied being the owner of a roughly 60 per cent stake.

Instead, his official position was an adviser, he said.

In a statement on March 22, SEC chairman Gary Gensler described Mr Sun as not just targeting US investors, but also coordinating wash trading to create a misleading impression of active trading in TRX.

He added: “(Mr) Sun further induced investors to purchase TRX and BTT by orchestrating a promotional campaign in which he and his celebrity promoters hid the fact that the celebrities were paid for their tweets.”