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The SEC’s Lawsuit Against Tron Founder Justin Sun
The U.S. Securities and Exchange Commission (SEC) has recently filed an amended complaint in its legal battle against Tron founder, Justin Sun. The essence of the new complaint centers around Sun’s travel to the United States, where he allegedly spent a substantial amount of time over a three-year period from 2017 to 2019.
The SEC highlighted that Sun had traveled extensively to the U.S., taking multiple business trips to key cities such as New York City, Boston, and San Francisco in 2019. Furthermore, the regulatory body pointed out Sun’s stays at an apartment in the U.S. rented by Rainberry, a company involved in the lawsuit.
The Allegations and Charges
In March 2023, the SEC had initially charged Sun and his affiliated companies, including Tron Foundation Limited, BitTorrent Foundation Limited, and Rainberry Inc., with the unlawful offering of unregistered securities through the Tronix (TRX) and BitTorrent (BTT) digital assets. Additionally, the lawsuit accused Sun and his entities of engaging in manipulative trading practices in the secondary market for TRX through extensive wash trading.
Moreover, the SEC alleged that Sun orchestrated a scheme to pay various celebrities, such as Lindsay Lohan, Jake Paul, and Soulja Boy, to promote TRX and BTT without disclosing the nature of their compensation.
Sun’s Denial and Legal Response
Justin Sun vehemently denied the accusations put forth by the SEC, labeling the lawsuit as part of a broader pattern targeting prominent figures within the blockchain and cryptocurrency industry. Sun contended that the SEC’s case lacked merit and refuted the claims made against him and his companies.
Notably, Sun and the Tron Foundation recently filed a motion to dismiss the SEC’s lawsuit, arguing that the regulatory body had exceeded its jurisdiction by attempting to apply U.S. securities laws to predominantly foreign activities. They claimed the SEC was overreaching and attempting to function as a regulatory authority on a global scale.
The SEC’s Position and Ongoing Developments
In response to the dismissal motion, the SEC reinforced its stance by asserting that it held jurisdiction over Sun and his affiliated entities due to their deliberate actions targeted towards the United States. The SEC cited the promotion of TRX and BTT to American investors, as well as the wash trading of TRX on Bittrex, a U.S.-based exchange, as key elements justifying its jurisdiction.
Despite the legal challenges, Justin Sun’s enthusiasm for business and innovation remains undeterred. Recent announcements from Tron include the release of “The Tron Anthem,” an orchestral composition inspired by Sun and composed by the renowned Academy Award-winning musician, Hans Zimmer.
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