SEC Updates Lawsuit Against Tron Founder Citing Jurisdiction due to U.S. Travels
Summary:
The U.S. Securities and Exchange Commission (SEC) has updated its lawsuit against Tron founder Justin Sun, alleging his extensive travels within the U.S. grants it jurisdiction over two of his businesses. The SEC argues these companies sold unregistered securities via TRX and BTT tokens and were involved in manipulative wash trading. In March, Sun requested the lawsuit's dismissal, maintaining U.S. security laws were improperly applied to mostly foreign actions.
The United States Securities and Exchange Commission has updated its legal action against Justin Sun, founder of Tron, alleging his extensive travel within the country gives the commission jurisdiction. In its revised complaint to a Manhattan federal court on April 17, the regulator asserts its personal jurisdiction over Sun and two of his businesses due to their activities targeted at and carried out within the United States. According to the SEC, between 2017 and 2019, Sun spent more than 380 days in the U.S. attending business meetings in cities including New York, Boston, and San Francisco.
The SEC maintains that these trips were made in relation to the Tron Foundation, BitTorrent Foundation, and Rainberry. These three entities, the SEC argues, are controlled by Sun and were named in the lawsuit as his proxy companies. The SEC's revised lawsuit restates the original claims that Sun and his companies offered and sold unregistered securities via Tron (TRX) and BitTorrent (BTT) tokens, also alleging Sun participated in manipulative wash trading.
According to the SEC, TRX and BTT were marketed, offered, and sold to customers and investors based in the U.S. The regulator emphasizes Sun's extensive U.S. travel during the period when TRX and BTT were being promoted, offered, and sold. It also asserts Sun's alleged TRX wash trades were facilitated by the Seattle-based crypto exchange, Bittrex.
In late March, Sun, a Chinese-born Grenadian citizen, requested the lawsuit be dismissed, arguing U.S. security laws were being inappropriately applied to largely foreign activity, thereby exceeding the SEC's jurisdictional reach. He insisted TRX and BTT tokens were exclusively sold overseas and that steps were taken to exclude the U.S. market. Sun also challenged the SEC's failure to demonstrate the tokens were initially offered or sold to any U.S. residents. Sun's legal team has yet to respond to a request for comment. This update is brought to you from Hall of Flame, where expert opinions from MetaLawMan predict Coinbase will prevail.
Published At
4/19/2024 9:30:40 AM
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