Crypto promoter Justin Sun attracts attention, this time from regulators

SINGAPORE — Crypto entrepreneur Justin Sun, who made headlines for paying millions to have lunch with Warren Buffett, is once again attracting attention, but this time for allegedly breaking US securities laws.

The Securities and Exchange Commission said Wednesday it has filed civil lawsuits against Mr. Sun and three of his companies in federal court in Manhattan for offering and selling two unregistered crypto tokens, Tronix, or TRX, and BitTorrent, or BTT. The regulator also alleged that it manipulated TRX prices between April 2018 and February 2019.

The SEC’s complaint “lacks merit,” Sun tweeted Thursday morning. The 32-year-old added that the charges were just the latest example of action the regulator has taken against “well-known players in the blockchain and crypto space.” When asked to comment, a spokesperson for Huobi, a firm where Mr. Sun is an adviser, referred the Wall Street Journal to Mr. Sun’s tweet.

The SEC has also filed civil lawsuits against eight celebrities, including “Mean Girls” star Lindsay Lohan. In court documents, the SEC alleged that the eight – who each had more than a million social media followers at the time – illegally promoted TRX and BTT. Ms. Lohan was paid $10,000 to tweet about TRX, according to a settlement agreement released by the SEC. Ms Lohan and five of the other celebrities have agreed to pay a total of $400,000 to settle the investigation.

But who is Mr. Sun?

Mr Sun is a Chinese national who studied at Peking University in Beijing before earning a master’s degree at the University of Pennsylvania, the SEC said. He is an advisor to Huobi, which was once one of the largest crypto exchanges in the world. He also founded blockchain company Tron, which is one of the defendants in the SEC lawsuit.

The SEC filing indicates that Mr. Sun is Grenada’s permanent representative to the World Trade Organization. He often uses the title “His Excellency” – abbreviated as HE – when referring to himself, according to current and former Huobi employees. He also uses the title in his Twitter profile.

In 2019, Mr Sun paid $4.6 million at an auction to secure a lunch date with legendary billionaire investor Warren Buffett, a prominent cryptocurrency skeptic. The crypto proponent said he hoped to discuss cryptocurrencies and blockchain with Mr. Buffett.

Illustration: Mallory Brangan

A month later, Mr. Sun said he had to postpone lunch. A Tron-affiliated foundation said it was because Mr. Sun had fell ill with kidney stones.

Late last year, Mr. Sun said he was seeking to recover some assets from collapsed crypto platform FTX, and that representatives from Tron and Huobi were in the Bahamas for discussions. FTX managers are now taking the dispute over who should control and distribute the assets of the imploded exchange to court.

Mr. Sun even waded through the recent banking turmoil. Sunday, while the Swiss group UBS AG

was in the midst of talks to buy rival Credit Suisse Group AG

, Mr. Sun has offered $1.5 billion to buy the bank. UBS then struck a deal to buy Credit Suisse for over $3 billion.

“By integrating Credit Suisse into a crypto-enabled financial institution, we can pave the way for a more innovative and decentralized financial system,” he said.

Credit Suisse has not publicly responded to the offer.

Write to Weilun Soon at [email protected]

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Appeared in the March 24, 2023 print edition as “Crypto Promoter Attracts SEC Scrutiny”.


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