The US government oversight agency responsible for regulating securities markets and protecting investors said Wednesday that it sued the founder and business executive of a cryptocurrency network due to fraud and securities law violations.

The Securities and Exchange Commission (SEC) said it announced charges against crypto asset entrepreneur Justin Sun and three of his wholly-owned companies -- Tron Foundation Limited, BitTorrent Foundation Ltd. and Rainberry Inc., formerly BitTorrent.

It said the charges included the unregistered offer and sale of crypto asset securities Tronix (TRX) and BitTorrent (BTT).

The SEC said it also charged Sun and his companies with "fraudulently manipulating the secondary market for TRX through extensive wash trading, which involves the simultaneous or near-simultaneous purchase and sale of a security to make it appear actively traded without an actual change in beneficial ownership, and for orchestrating a scheme to pay celebrities to tout TRX and BTT without disclosing their compensation."

The price of TRX was down more than 11% at 5 p.m. EDT.

The SEC also said in a separate statement that it simultaneously charged eight celebrities for illegally touting TRX and BTT without disclosing that they were compensated.

The complaint alleged that Sun and his companies offered and sold TRX and BTT as investments through multiple unregistered “bounty programs."

The SEC argued that those programs directed interested parties to promote the tokens on social media -- through joining and recruiting others to Tron-affiliated Telegram and Discord channels -- and create BitTorrent accounts in exchange for TRX and BTT distributions, AA reports.