[HN Gopher] SEC charges crypto entrepreneur Justin Sun and his c...
       ___________________________________________________________________
        
       SEC charges crypto entrepreneur Justin Sun and his companies for
       fraud
        
       Author : VagueMag
       Score  : 153 points
       Date   : 2023-03-22 19:57 UTC (3 hours ago)
        
 (HTM) web link (www.sec.gov)
 (TXT) w3m dump (www.sec.gov)
        
       | code_biologist wrote:
       | There's currently US congressional hearings going on about
       | cryptocurrency regulation. This is admittedly from a very pro-
       | crypto source, but great video overview of the most recent
       | testimony: https://www.youtube.com/watch?v=xohK2W07F0Q
       | 
       | I'm very very glad for any consumer protection, but it does come
       | across like the SEC is setting up a narrative of crypto risk as a
       | reason to repress transactions between it and the traditional
       | banking system.
        
         | smackeyacky wrote:
         | Is this one of those "self aware wolf" situations?
        
         | cal5k wrote:
         | The revelation that FDIC (allegedly) forced Signature's
         | acquirer to divest of cash holdings from crypto companies is
         | another bit of evidence that anti-crypto regulatory activism is
         | a very real thing.
         | 
         | Which is quite silly because crypto is still small peanuts
         | compared to the bank failures that happened recently.
        
           | ForHackernews wrote:
           | You mean the bank failures where good regulations and
           | government intervention mean that depositors aren't out a
           | cent? _Those_ bank failures?
           | 
           | I'm not sure this is quite the example you think it is...
        
           | paxys wrote:
           | I don't see the "anti-crypto regulatory activism" you are
           | calling out. If FDIC is bailing out a bank and its
           | depositors, that too well beyond its insurance limit, it
           | absolutely has to ensure that the bank is not going to
           | continue to gamble with customer funds.
           | 
           | Heck "no customer deposits going into crypto" should be a
           | hard requirement to be eligible for FDIC insurance.
        
           | vkou wrote:
           | Being a crypto-focused bank carries most of the same risks as
           | being a startup-focused bank (But worse), and in case anyone
           | missed the news the other week, one of those just exploded
           | with what could have been a much bigger hole on its balance
           | sheet had the FDIC waited.
        
         | pavlov wrote:
         | Setting up a narrative? Did the SEC orchestrate FTX and all the
         | other crypto failures?
         | 
         | They're finally taking steps to actively protect retail
         | investors. This should have happened after the ICO boom of
         | 2017. Nothing of value would have been lost if crypto had been
         | unbanked the past five years.
        
           | cypress66 wrote:
           | The kind of protection people want: this exchange is not
           | going to steal my funds
           | 
           | The kind of "protection" regulators want: you can't buy or
           | use crypto
        
             | pavlov wrote:
             | The sad truth is that all the exchanges are going to steal
             | your funds. Some of them just go about it in more
             | sophisticated ways, like Coinbase paying out billions in
             | stock-based compensation while losing money.
        
               | piqi wrote:
               | > The sad truth is that all the exchanges are going to
               | steal your funds.
               | 
               | > like Coinbase paying out billions in stock-based
               | compensation while losing money
               | 
               | I really wish people put more effort into arguing their
               | side in these discussions. Your point is absurd and lazy.
               | 
               | [public company] pays some % of employee salary in stock
               | >> while "losing money" >> ??? >> customer's property is
               | stolen.
               | 
               | > Did the SEC orchestrate FTX and all the other crypto
               | failures
               | 
               | FTX's problems were amplified by being unregulated,
               | outside the US. The overwhelming majority were not US
               | residents. The SEC didn't have jurisdiction over their
               | International firm. The US version of FTX was handled
               | very differently, but supposedly co-mingled funds. They
               | FAILED to protect US residents by not shutting down the
               | US version. They could have gave warnings about the
               | international firm, instead of working so closely with
               | FTX's founder.
               | 
               | As usual, lots of hand-waving from crypto detractors. You
               | have a clear bias. Sadly, when enough people share a
               | bias, truth and facts are irrelevant. There's a lot to
               | criticize about in crypto. No need to make up irrelevant
               | associations.
        
               | pavlov wrote:
               | When Coinbase files for bankruptcy, crypto deposits will
               | be at the back of the line. They are unsecured creditors.
               | The company itself says that: https://www.bloomberg.com/n
               | ews/articles/2022-05-11/coinbase-...
               | 
               | Coinbase executives will have enjoyed years of massive
               | pay days selling stock pumped up with customer money. The
               | customers who assumed the money in their accounts is
               | protected like with a bank will be wiped out.
        
               | piqi wrote:
               | > When Coinbase files for bankruptcy, crypto deposits
               | will be at the back of the line. They are unsecured
               | creditors.
               | 
               | I'm aware. This has nothing to do with your point about
               | "stealing" deposits like other exchanges (e.g. FTX), and
               | is irrelevant to stock-based compensation. It contributes
               | nothing to the discussion. More noise to encourage others
               | to feel safe that their bias is well liked.
               | 
               | > Coinbase executives will have enjoyed years of massive
               | pay days selling stock
               | 
               | More irrelevant and false points. The company has only
               | been public since April 2021. Not even two years. You are
               | attempting to frame them as fat cat wall street types
               | purposefully driving the company into the ground at
               | customers' expense.
               | 
               | Somehow you extrapolate this to "all exchanges" when
               | Coinbase is the only publicly-traded exchange.
               | 
               | remember that Coinbase was audited by the SEC before
               | going public, and is one of the oldest exchanges. If any
               | exchange is safe, it's Coinbase. The problem is the SEC
               | doesn't give clear direction.
               | 
               | Anybody that feels the SEC will "protect" them by forcing
               | coinbase into bankruptcy is welcome to move their assets
               | on-chain. Many people advocate for that.
               | 
               | Again, I'm highlighting how lazy and absurd your argument
               | is.
        
               | pavlov wrote:
               | It doesn't seem like you know what your argument is.
               | 
               |  _> "If any exchange is safe, it 's Coinbase"_
               | 
               | Ok, so other exchanges are worse.
               | 
               |  _> "Somehow you extrapolate this to 'all exchanges'"_
               | 
               | You just told me the other exchanges are worse.
               | 
               |  _> "You are attempting to frame them as fat cat wall
               | street types purposefully driving the company into the
               | ground at customers ' expense"_
               | 
               | It doesn't have to be purposeful. At the rate Coinbase is
               | piling up losses, it will eventually be bankrupt, and
               | executives will have accumulated billions while customers
               | will lose billions. The SEC isn't going to force a
               | bankruptcy; Coinbase's own poor management seems to be
               | doing it.
               | 
               |  _> "... is welcome to move their assets on-chain. Many
               | people advocate for that."_
               | 
               | Oh, so you agree with me that nobody should use crypto
               | exchanges in the first place. Because they will lose your
               | money.
        
               | cypress66 wrote:
               | Thus the regulation so exchanges have to prove they have
               | all the funds and aren't doing anything funny with it...
        
             | stanleydrew wrote:
             | There are a number of obvious counterexamples to this,
             | Coinbase's continued existence being just one.
        
               | Osiris wrote:
               | They just got a Wells notice:
               | 
               | https://www.reuters.com/legal/coinbase-issued-wells-
               | notice-b...
        
               | greenyoda wrote:
               | HN disucssion of that:
               | https://news.ycombinator.com/item?id=35267407
        
             | pessimizer wrote:
             | The kind of protection people want: their in high-risk
             | investments being protected as if they were in low-risk
             | investments. They also want to eat cakes but still have
             | those same cakes.
        
       | kerblang wrote:
       | Whoa celebrity charges too. You just knew Jake Paul had his hand
       | in so much bad crypto he was gonna get nailed eventually. I
       | suppose Coffeezilla will struggle to suppress the glee.
       | 
       | Edit:
       | 
       | > With the exception of Cortez Way and Mahone, the celebrities
       | charged today agreed to pay a total of more than $400,000 in
       | disgorgement, interest, and penalties to settle the charges,
       | without admitting or denying the SEC's findings
       | 
       | Meh ok pfft
        
         | yunohn wrote:
         | > without admitting or denying the SEC's findings
         | 
         | I've never understood why this loophole of "non admission of
         | guilt" exists in our legal systems.
        
           | CaptainNegative wrote:
           | It allows one to settle a civil manner without self-
           | incriminating if the same act is also criminal. This grants
           | more flexibility to civil procedure without overstepping
           | fifth amendment bounds.
        
             | pessimizer wrote:
             | > This grants more flexibility
             | 
             | Do we need that flexibility? The flexibility to extract a
             | settlement from guilty people without an acknowledgement of
             | guilt seems to be a worthless prize unless we're enforcing
             | legislation for revenue's sake. I wouldn't complain about
             | that just because it seems venal, I really find it silly
             | because the amount of revenue is minuscule irt the budget.
        
               | themitigating wrote:
               | What's the value of marking someone as guilty? The fine
               | is a punishment.
        
           | dragonwriter wrote:
           | It exists in the civil (but not criminal) justice system so
           | that civil disputes can be resolved without the parties
           | making admissions that could be used against them in separate
           | litigation (including, especially, criminal process, with its
           | higher standard of proof and potentially more severe personal
           | consequences.)
           | 
           | Given the overlap between torts and crimes, it would be much
           | longer and more painful to resolve tort cases if the settling
           | part might have to admit an act that was also a crime.
        
             | schoen wrote:
             | In some jurisdictions, it also exists, partly for a similar
             | reason, in the criminal justice system.
             | 
             | https://en.wikipedia.org/wiki/Nolo_contendere
        
           | paulpauper wrote:
           | I hate it too. It allows people to engage in borderline fraud
           | knowing that if they get caught they pay a fine and keep some
           | of the ill-gotten gains anyway. Like a get out of jail free
           | card. Worst comes to worse, you settle and admit no
           | wrongdoing and pay fine. Best case scenario, you avoid the
           | dragnet and nothing happen, so you keep scamming. Either way,
           | you avoid jail.
        
           | adoxyz wrote:
           | To protect the wealthy.
           | 
           | Pay a small fine that represents a tiny portion of your ill-
           | gotten gains and move on without any repercussions.
        
             | Alupis wrote:
             | > To protect the wealthy.
             | 
             | Hardly.
             | 
             | The SEC cannot say you are guilty without proving it within
             | the bounds of the legal system. This "non admission of
             | guilt" is a way to sidestep a lengthy, costly legal process
             | and get a result for the impacted parties sooner rather
             | than much _much_ later.
        
               | joecool1029 wrote:
               | Saves time and money for all involved parties. It's
               | literally like a parking ticket in this sector. Years
               | back I had clients who were penny stock promoters and
               | every one of their sites had to have a disclaimer which
               | if you clicked and read listed how much and from who they
               | were paid for each promotion. That's all it would have
               | taken for them to avoid this fine even as grimy as the
               | industry is.
        
               | dragonwriter wrote:
               | > The SEC cannot say you are guilty
               | 
               | Pretty much ends there. The SEC can say you are civilly
               | liable, and they can assess fines in some situations and
               | initiate civil litigation in others based on that.
               | 
               | But if they think you are guilty, that's an issue they
               | hand off to the Justice Department.
        
               | Alupis wrote:
               | We can split hairs all day regarding exactly who brings
               | charges or whatever - but it doesn't matter. In basic
               | terms:
               | 
               | If the SEC says you are liable or guilty in any way for
               | anything, you can contest it via the legal system. That's
               | what the legal system is for...
               | 
               | Again, this "non admission of guilt" sidesteps
               | _everything_ and cuts straight to the end result.
               | 
               | In this specific case, it literally means the SEC either
               | felt their case wasn't strong enough to guarantee an
               | outcome, or litigating the case would become exceedingly
               | costly and unproductive - again without a guarantee of an
               | outcome.
               | 
               | "Non admission of guilt" payments guarantee a speedy
               | outcome. That is the entire point.
        
               | dragonwriter wrote:
               | > Again, this "non admission of guilt" sidesteps
               | everything and cuts straight to the end result.
               | 
               | It's a settlement agreement, and, yes, that's the whole
               | point - they resolve a situation subject to civil
               | litigation without litigation, but leaving the settling
               | party no worse off than if they had fought and had the
               | agreement contents instead imposed as a remedy. Requiring
               | admissions as part of a settlement would not do that,
               | settling would then in many cases be _worse_ than losing.
        
               | Alupis wrote:
               | We're saying the same thing, even if you write it more
               | elegantly than I.
        
               | dragonwriter wrote:
               | Yeah, sorry I kind of snapshotted the last one and
               | thought you were taking issue with the short-circuiting
               | rather than merely describing it.
        
               | pessimizer wrote:
               | Is SEC enforcement even revenue positive/profitable? The
               | "result for the impacted parties" is a pretext,
               | especially if we intentionally and carefully preserve the
               | ability to continue to reoffend in the exact same way.
        
           | themitigating wrote:
           | "Ok so you can either go to trial OR just be guilty now and
           | get punished, what a deal right?"
        
           | el_nahual wrote:
           | Because otherwise you force the innocent to go through a
           | lengthy (and expensive) investigation that is not necessary
           | for the guilty (who would be ok with paying a fine)!
           | 
           | "I didn't do it, but I'd rather pay the fine than go to
           | court" is a perfectly reasonable outcome.
        
           | notahacker wrote:
           | Presumably for the same reason it's more efficient to let
           | people agree to pay parking fines up front rather than go to
           | the extra time and expense of court for the sake of seeing
           | whether they'll agree to say the word "guilty" or not. The
           | SEC has higher priorities than sullying the name of Lindsay
           | Lohan and Soulja Boy, and fining them substantially more than
           | they got paid is ample deterrent.
        
             | vasco wrote:
             | > substantially more
             | 
             | I was curious, so I checked Jake Paul:
             | 
             | > Respondent shall, within 20 days of the entry of this
             | Order, pay disgorgement of $25,019, prejudgment interest of
             | $1,811, and a civil money penalty in the amount of $75,057
             | to the Securities and Exchange Commission
             | 
             | Jake Paul was paid $25k for a tweet and was ordered to pay
             | back a bit over $100k. Only other restriction is he can't
             | be paid for anything related to crypto in the next 3 years.
             | Paying back the original money + 3x as fine seems
             | reasonable I guess.
        
               | tobyjsullivan wrote:
               | It's all relative, perhaps.
               | 
               | It might be different if anybody believed these
               | celebrities were actively trying to defraud and harm
               | people.
               | 
               | The reality is more likely that these people are
               | effectively human billboards. People pay them to read a
               | script, and they read it. Each week a different product,
               | different script, same deal.
               | 
               | So they got suckered into reading an illegal script. They
               | get penalized (rightly) but it doesn't necessarily need
               | to be extreme.
               | 
               | And now the SEC gets to show off their win using the same
               | billboards.
        
             | pessimizer wrote:
             | I'm pretty sure that the last time I paid a parking ticket,
             | I had the option to check a box that indicated that I was
             | guilty, or the option to go to court. I did not get the
             | option to pay the fine, but not to be recognized as guilty.
        
           | [deleted]
        
       | ljhsiung wrote:
       | >> The SEC simultaneously charged the following eight celebrities
       | for illegally touting TRX and/or BTT without disclosing that they
       | were compensated for doing so and the amount of their
       | compensation.
       | 
       | * 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)
       | 
       | I had to doubletake. Never did I ever think I'd see this
       | permutation of celebrities in an SEC report.
        
         | hn_throwaway_99 wrote:
         | And a perfect snapshot for what a steaming pile of BS all this
         | crypto-hucksterism was in the first place.
         | 
         | I admit, I don't understand humans. I'm just trying to
         | comprehend how anyone would think it a good idea to buy a token
         | because any one of these celebrities hawked it.
        
           | thefounder wrote:
           | It's just FOMO. You surely experienced it until now. It's
           | "irrational" because people make many irrational(emotional)
           | decisions. Sometimes it pays off to ride the wave but we all
           | know that most will not make it...however the potential
           | upside is too great to "miss" it...until you lose.
        
           | komali2 wrote:
           | I bet you can think of some irrational things you've done in
           | the last few years. I'd be curious what they might be.
           | 
           | Let's see, for me... Well any time I got games in a steam
           | sale recently, my backlog is huge and I don't have time
           | anyway. Any time I spend on Twitter, I know I don't enjoy how
           | I feel after. Plenty of times I had irrational excuses for
           | why I didn't have to go to the gym on a given day. Made a
           | batch of really good ice cream despite trying to lose weight.
           | Etc.
           | 
           | When I was younger I made some irrational decisions in
           | stocks, now I don't anymore, I think if you get burned enough
           | maybe that's what it takes? I too often wonder why people
           | seem to need to "learn the hard way." For me, if a friend
           | gets in a car accident, I listen to how it happened and make
           | sure to never repeat their mistake, triple for motorcycling.
           | But maybe its domain specific in that regard? Some people are
           | good at being more rational in some areas rather than others?
        
           | di456 wrote:
           | Humans have a soft spot for snake oil. Always have, always
           | will.
           | 
           | "If it sounds too good to be true" vs "but everyone else is
           | doing it"
        
           | jallen_dot_dev wrote:
           | It's simple: they thought they could later sell it for more.
           | Celebrities hawking it is "bullish" because other people
           | (suckers) will see the hype and want to buy their bags.
           | Unfortunately for them, they were the suckers.
        
           | goldenkey wrote:
           | A lot of it is young kids or college students with
           | undeveloped brains and a lack of good guidance. Then a bunch
           | is desperate needy or greedy folks who are thinking
           | impulsively.
        
             | jkubicek wrote:
             | it's also just plain advertising. When the celebrities
             | listed in these charges say that they're buying NFTs, a
             | whole lot of people are going to see that and notice.
             | 
             | The number of people that buy an NFT because Soulja Boy
             | bought one is probably pretty small. The number of people
             | who buy NFTs because "everyone else is" is much much
             | larger.
        
               | pavlov wrote:
               | Yes, in advertising terms these endorsements are not
               | tactical but strategic. You want to create an ambience
               | where people sense that everyone successful is now
               | getting into crypto/NFTs. That kind of diffuse group
               | pressure is much harder to consciously analyze than "do I
               | want to buy this thing because Soulja Boy told me to?" --
               | and thus much more effective over time.
               | 
               | Crypto seems to have been particularly powerful at
               | preying on women and minorities who felt like they're
               | missing out with mainstream finance. This kind of highly
               | focused influencer marketing within communities must have
               | been a major contributor to its uptake.
        
             | nradov wrote:
             | Is that really true? When I was in college some years ago I
             | didn't fall for any scams and few of my classmates did
             | either. Most of us barely had money for beer and textbooks,
             | so there wasn't much to scam from us in the first place.
             | Has the situation changed?
        
         | tmpz22 wrote:
         | If you're an E-list celebrity on TMZ you're a B-list on Cameo I
         | guess.
        
         | Animats wrote:
         | The last group of celebrities to get in trouble with the SEC
         | started with Kim Kardashian, who endorsed Etherium Max without
         | disclosing it was a paid endorsement.
         | 
         | Then there's the whole Guy Oseary/Yuga Labs/BAYC promotion
         | scam.[1] That's in litigation. Short version: all those
         | celebrities who announced that they'd bought Bored Ape NFT's
         | didn't have to pay for them.
         | 
         | [1] https://variety.com/2022/digital/news/bored-ape-yacht-
         | club-c...
        
           | miohtama wrote:
           | Technically Kardashian disclosed it with #ad tag, but because
           | it was settled outside the court, we do not know if this is
           | sufficient disclosure.
        
         | arthurcolle wrote:
         | Floyd Mayweather was also boosting Ethereum Max at Bitcoin 2021
         | in Miami - When he said "maybe one day there'll be a better
         | crypto than BTC... like Ethereum Max" immediately the crowd
         | started booing him (expected, at a BTC conf), pretty funny
         | 
         | I wonder how he managed to slip through!
        
       | thowland wrote:
       | It's not clear that the SEC has jurisdiction here; there doesn't
       | seem to be a bright line test deciding if crypto is a security or
       | a commodity. This behavior might be better regulated by the FTC
       | than the SEC.
        
         | arcticbull wrote:
         | Sure there is, it's the Howey Test and the SEC has a whole
         | publication on how to apply it to crypto. Fun fact, it's
         | probably safe to assume that any ICO is a securities offering.
         | [1]
         | 
         | This is a case of "there is a bright line but the community
         | doesn't like where they painted it, so they pretend there isn't
         | one."
         | 
         | [1] https://www.sec.gov/corpfin/framework-investment-contract-
         | an...
        
           | peyton wrote:
           | The CFTC disagrees [1]. Hardly a bright line.
           | 
           | [1]: https://decrypt.co/123032/cftc-chair-says-ethereum-is-a-
           | comm...
        
             | arcticbull wrote:
             | He would say that because he wants jurisdiction.
             | 
             | His argument appears to be "let's just sunk-cost our way
             | through instead of actually doing the correct thing."
             | 
             | > "It's been listed on CFTC exchanges for quite some time,
             | and for that reason," said Behnam, who argued that it
             | creates a "direct jurisdictional hook" for the agency to
             | police both ETH's derivatives market and underlying market.
             | 
             | Either way they're literally only talking about ETH, which
             | is again, clearly a security as following their framework,
             | nothing else has a long history of being listed on a CFTC
             | exchange. But I digress.
        
               | peyton wrote:
               | I feel like you're painting good-faith disagreement as
               | "community pretending there isn't a bright red line" or
               | "he would say that because he wants jurisdiction," so I
               | don't think there's more to talk about.
        
               | pessimizer wrote:
               | There's no basis for arguing about your feelings. Your
               | emotions are yours.
        
       | VagueMag wrote:
       | The SEC's major focus on wash trading in this complaint might
       | have some interesting implications for the broader crypto
       | ecosystem.
        
       | brutusurp wrote:
       | Been waiting for this since Tron was released.
        
       | [deleted]
        
       | mavu wrote:
       | Mhhmm, is it popcorn time yet?
        
       | [deleted]
        
       | javier123454321 wrote:
       | Honestly, most (if not all with the exception of bitcoin) of the
       | 'crypto' projects function effectively like a startup with the
       | coin as the stock. There are some differences from securities,
       | but mostly similarities. You are buying something with the hope
       | that the development team will deliver on promised value in the
       | future. This will at least clarify the regulatory landscape going
       | forward.
        
         | Animats wrote:
         | That's more like a Kickstarter.
         | 
         | The number of crypto projects that ever turned into a
         | profitable enterprise for the investors by doing something
         | outside the crypto space seems to be near zero.
        
           | vasco wrote:
           | Is there even a single project that qualifies under those
           | requirements?
        
         | mjr00 wrote:
         | Except with a startup or a company's stock, you ostensibly care
         | that what the company is building or doing could potentially
         | have value in the future. With the crypto projects over the
         | past few years, it's purely been about whether or not you hop
         | in early enough in the pyramid to resell your tokens to a
         | greater fool before it collapses.
        
           | Clubber wrote:
           | It's like a company "Stocks, Inc" that just issues their own
           | stocks as a product. When you put it that way, it definitely
           | sounds suspect.
        
             | mjburgess wrote:
             | Yes: there is no product.
        
       | 1vuio0pswjnm7 wrote:
       | Will Signal be next.
       | 
       | https://www.theverge.com/22872133/signal-cryptocurrency-paym...
        
       | stusmall wrote:
       | Is this the first example of someone getting charged for wash
       | trading in the cryptoworld? It was my understanding it was
       | common, but unsavory, for new tokens to do this to artificially
       | pump their volume up.
        
       | pwb25 wrote:
       | It's so funny how SEC think they can just walk around and charge
       | anyone in the world with some made up law
       | 
       | imagine chinese SEC or egyptian SEC doing that to americans
        
         | iLoveOncall wrote:
         | First, all laws are made up.
         | 
         | Second, the Chinese SEC or the Egyptian SEC can very well
         | charge Americans with whatever they want. It's just that those
         | Americans probably don't care enough about China or especially
         | Egypt to abide by the punishment they receive and would rather
         | not do business with those countries and never set foot in it.
         | 
         | I, iLoveOncall, am hereby charging you with the crime of
         | idiotic comment, for which you will receive the death penalty
         | by ball slapping. Surrender yourself to the Republic of
         | iLoveOncallandia to receive your punishment.
         | 
         | It's literally the same thing.
        
           | pwb25 wrote:
           | exactly they can on paper, but no one will care or be
           | expected to care. that's what the ridicolous difference is
        
         | xtracto wrote:
         | They can do it... it's as if Iran's government prosecutor body
         | charged someone living in the US of "not wearing a burka" or
         | whatever crazy law. They can definitely do it, and they can try
         | to move strings to get to them. Their success will depend on
         | their power to enforce it and coerce other countries to
         | surrender the person(s).
         | 
         | It's like the news we have seen in the last days, of different
         | countries committing to arrest Putin for whatever crimes.
         | 
         | But yeah, I agree with your overall sentiment: This is a USA
         | legal system/government arm (SEC) playing "world police". They
         | should just tag Tron and related cryptos as "sanctioned/illegal
         | schemes" and prosecute anyone in their country who
         | uses/operates them. Anything else is just meddle with other
         | countries' citizens.
        
       | smcl wrote:
       | Was this not the guy who was trying to buy Credit Suisse?
        
       | uticus wrote:
       | > The SEC also charged Sun and his companies with fraudulently
       | manipulating the secondary market for TRX through extensive wash
       | trading...
       | 
       | 1. How is this detected by the SEC?
       | 
       | 2. Why isn't this something that is easily detectable by the
       | average investor?
        
         | csomar wrote:
         | justin sun has a rather bad reputation in the crypto industry.
         | He was able to sustain his token during all that time, however.
        
         | MomoXenosaga wrote:
         | The average "investor" is a gambling addict or financially
         | desperate Reddit cryptocurrency poster. They don't care beyond
         | NUMBER GO UP and I am certain Justin Sun knows that too.
        
           | xeromal wrote:
           | It feels similar to those late note collectible coin programs
           | that people buy into.
           | 
           | "Get your pristine 1950 silver eagle collection for 5000$
           | before they're all sold out!"
        
         | nickff wrote:
         | It looks like at least some of Justin Sun's suspicious behavior
         | had been 'detected' by non-regulators some time ago:
         | https://cryptoslate.com/justin-sun-backs-ftx-debt-token-fud-...
         | 
         | That was from a quick Google search, so I'm sure there are many
         | more accusations. It seems like the SEC has never been the
         | 'first' to detect a fraud, and they've frequently ignored ones
         | that have been pointed out to them (such as Madoff).
        
         | [deleted]
        
         | Animats wrote:
         | > Why isn't this something that is easily detectable by the
         | average investor?
         | 
         | Because much crypto trading is just transactions within some
         | crypto exchange, and never makes it to the blockchain.
        
         | toomuchtodo wrote:
         | Vendors + training
         | 
         | https://www.coindesk.com/business/2020/02/10/inside-chainaly...
         | 
         | https://www.coindesk.com/markets/2019/07/12/irs-confirms-it-...
        
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