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| SEC charges Justin Sun and Tron Foundation for violating securities laws, TRON price crashes 12% |
The Security and Exchange Commission (SEC) has charged Tron founder Justin Sun and his three wholly-owned companies, including the Tron Foundation, for offering and selling unregistered assets. The SEC also accused Sun of fraudulently manipulating the secondary market for TRX through extensive wash trading. In addition, eight celebrities, including Lindsay Lohan and Jake Paul, were charged for illegally promoting the TRON ecosystem tokens. The charges have led to TRON's price plunging by 12.5% in the span of an hour.
This is the latest instance of the ongoing regulatory crackdown in the United States against the crypto space. The SEC recently targeted Kraken for selling an unregistered crypto staking service program, and the penalty amounted to $30 million. This has raised concerns in the crypto community regarding SEC’s stance on staking, as Ethereum and many other altcoins are built on the Proof of Stake (PoS) consensus method. However, the SEC has not taken any major step in this direction since the Kraken takedown.
TRON's price reaction to the SEC’s charges was strong, with the altcoin falling to $0.0587, losing three major support levels, namely the 50-, 100-, and 200-day Exponential Moving Averages (EMAs). The confluence of the 100- and 200-day EMA now stands as the critical resistance level that the TRON price needs to breach to mark a sustained recovery. The cryptocurrency is also vulnerable to a dip below the critical support at $0.0572, and losing this base would push TRX down to 2023 lows of $0.0518, noting a 22.73% crash.
