The U.S. Securities and Exchange Commission (SEC) has officially filed charges against Justin Sun, the founder of TRON and member of the Huobi Global Advisory Committee, accusing him of illegal securities sales, fraud, and market manipulation. The SEC further alleges that Justin Sun fraudulently manipulated the secondary market for TRX and implicates the TRON Foundation, BitTorrent Foundation, and BitTorrent (now known as Rainberry) in the investigation. It is reported that Justin Sun attempted to artificially increase the trading volume of TRX through virtual transactions (wash trading), with over 600,000 wash trades being identified and a daily trading volume of 4.5 to 7.4 million TRX. All the assets (TRX) used in these illegal transactions were provided by Justin Sun himself.
The SEC alleges that these cryptocurrencies are unregistered securities, which means that they need to be registered and comply with securities regulations. Therefore, the issuers and exchanges of these cryptocurrencies need to obtain relevant legal certificates and documents, such as securities registration statements and regulatory licenses, to comply with securities regulations.
The main purpose of these documents and certificates is to prove the legality of the cryptocurrencies' issuance and trading and to establish their rights and obligations similar to traditional securities. Specifically, these documents and certificates can be used to:
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Demonstrate the legality of cryptocurrencies to regulatory authorities and obtain regulatory licenses.
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Prove the legality and risks of cryptocurrencies to investors, protecting their interests.
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Assist exchanges in risk management and compliance audits to ensure the safety and legality of cryptocurrency transactions.
Cryptocurrency securitization is the process of transforming cryptocurrencies or other digital assets into securities products that comply with securities regulations. This securitization can enhance the liquidity of cryptocurrency, making it easier to trade and invest in, and providing investors with more transparency and protection.
The following are the requirements for cryptocurrency securitization:
Legal framework: Securitization needs to comply with local securities regulations, so an appropriate legal framework needs to be established. Securities regulations may vary in different countries and regions, requiring the formulation of corresponding securitization rules locally.
Technical platform: A secure and reliable technical platform is needed to manage the issuance, trading, and settlement of securities products. These platforms need to comply with local regulatory requirements and provide high levels of security and stability.
Investor authentication: Investors need to undergo appropriate authentication procedures to verify their identities, ensuring that they meet investment requirements and understand investment risks.
The advantage of obtaining these certificates and documents is gaining recognition and trust from regulatory authorities, allowing cryptocurrencies to be issued and traded in a more legal and secure manner. Compliance with securities regulations also protects the rights of investors and reduces the occurrence of illegal activities such as fraud and market manipulation.
For individuals and organizations issuing cryptocurrencies, obtaining relevant legal certificates and documents is necessary to ensure the legality and security of cryptocurrencies and to avoid legal lawsuits and regulatory risks.