On March 22, 2023, the SEC published a press release that it had opened an investigation on Justin Sun’s Tron Foundation and two other allied companies. This situation has led to the de-peg of USDD, which earlier fell to $0.92 after the USDC de-peg.
SEC’s Fraud Investigations Against Justin Sun And Tron
On March 22, 2023, SEC issued a press release that charged Justin Sun’s Tron Foundations, Bittorrent Foundation, and Rainberry Inc., for involvement in alleged securities fraud, manipulation of secondary markets, wash trading (fictitious transactions), etc. They are also charged with paying celebrities and involving them in promoting their product without disclosing the compensation for the same.
The case has been filed in the same U.S. District Court for the Southern District of New York, where the Ripple vs. SEC case is in motion.
The following eight celebrities were charged for promoting cryptocurrencies without full disclosure.
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- Lindsay Lohan
- Jake Paul
- DeAndre Cortez Way (Soulja Boy)
- Austin Mahone
- Michele Mason (Kendra Lust)
- Miles Parks McCollum (Lil Yachty)
- Shaffer Smith (Ne-Yo)
- Aliaune Thiam (Akon)
The main charges(as it seems) are about Justin Sun and associates’ alleged secondary market manipulations. The SEC alleges in the same press release that they were involved at least from April 2018 to February 2019 in 600,000 alleged wash trades, with between 4.5 million to 7 million TRX being wash traded daily. Also, Justin Sun allegedly sold $31 million worth of TRX in secondary markets.
The charges further allege that Justin Sun and associates sold Bittorrent (BTT) cryptocurrencies in airdrops to people in the USA and elsewhere who had purchased and held TRX in Tron Wallets. They also supposedly run multiple “bounty programs,” which were unlawful as per SEC.
As per the SEC, except for Cortez Way and Mahone, other celebrities agreed to pay $400,000 to settle all disputes.
USDD And Tron’s Future. Will They Recover?
USDD and Tron together represent a $6 billion-plus ecosystem consisting of $ 720 million worth of USDD and $5.6 billion worth of Tron. The ecosystem also hosts a significant amount of USDT stablecoin in its TRC-20 form, totaling worth $1.2 billion. If the Tron blockchain goes defunct, it could erase up to $7.5 billion in wealth.
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Price recovery depends much on the recovery of USDD. The cryptocurrency has de-pegged in the past several times due to fear of non-sufficient reserves.
Tron Price Analysis
Tron(TRX) price is around $0.063, 5% down from $0.068. It had earlier fallen to $0.056 but had recovered.
Price Analysis shows a neutral to weak trend.
- RSI has bounced back from the level of 40, which signals moderate strength. This also indicates that the price would not fall steeply.
- MACD shows a negative signal with the signal line crossing above the MACD line.
- The selling volume is on the negative side, with high selling based on speculation.
Overall the technical analysis shows that the price might break further, but there is no indication of massive selling.
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Sentiment Analysis
Sentiment analysis resonates with Technical analysis and shows a neutral mood. CFGI shows a positive sentiment, while Crypto EQ shows a neutral sentiment.
Target and Stoploss
It is best advised to see the situation, and if there is some positive news, Tron could be bought with an immediate target of $0.07 and a stop loss of $0.056.
Conclusion
The investigations on Tron seem to benefit from Ripple vs. SEC case, where SEC has not been able to prove much in court despite a long battle since Dec 2020. However, the outcome of the Ripple vs. SEC case will also greatly impact these investigations.
Disclaimer: Voice of crypto aims to deliver accurate and up-to-date information, but it will not be responsible for any missing facts or inaccurate information. Cryptocurrencies are highly volatile financial assets, so research and make your own financial decisions.
