The Securities and Exchange Commission (S.E.C.) has filed charges against cryptocurrency entrepreneur Justin Sun and a group of celebrities for illegally promoting his ventures. The S.E.C. claims that Sun violated securities laws related to the management of his crypto companies and that he engaged in manipulative trading practices that created an artificial appearance of investor interest. The agency also accused Sun’s companies of offering unregistered cryptocurrencies.
The S.E.C.’s crackdown on the crypto industry has been ongoing, with fines and penalties levied against crypto lending firms, and a settlement reached with Kraken, one of the largest American crypto exchanges. The agency’s actions come amidst growing scepticism about the viability and legality of crypto from federal banking regulators.
According to the New York Times, Sun had recently been trying to rebrand himself as a “crypto diplomat,” but the charges filed against him and the celebrities promoting his companies have damaged his reputation. Sun has not yet commented on the charges.
The S.E.C.’s actions against Sun and the wider crypto industry highlight the need for increased regulatory scrutiny to protect investors from fraudulent activities. As the agency continues to clamp down on the sector, it remains to be seen how the industry will respond to the increased pressure.
In the words of the S.E.C., “The public was misled into believing that these celebrities had unbiased interest in TRX and BTT, and were not merely paid spokespersons.” The NYT reported on the charges filed against Justin Sun and the group of celebrities he paid to promote his cryptocurrencies.
A new era of SEC scrutiny on Crypto
The charges filed against the celebrities who promoted his cryptocurrencies signal a new era of scrutiny for the crypto industry. As regulators become more skeptical about the sector, it is likely that we will see more enforcement actions and fines against companies and individuals who violate securities laws.
While the industry has the potential to revolutionize the way we think about finance and investment, it is important that it operates within the bounds of the law and protects investors from fraudulent activities. As the S.E.C. continues to ramp up its efforts, the crypto industry will need to adapt and evolve to meet the changing regulatory landscape.
Consequences for the iGaming Industry
It will be interesting to see what will be the consequences of more and more strict regulatory frames to the crypto casinos and other online gambling and web3 lotteries and Web3 esports initiatives. While they expand and grow, a regulatory frame might be positive to protect investors, entrepreneurs and final users.