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US SEC Amends Complaint Against Justin Sun Alleging Lack of Jurisdiction
The United States Securities and Exchange Commission (SEC) recently filed an amended complaint in its ongoing case against Justin Sun and other defendants, claiming that Sun’s alleged visits to the US provide sufficient basis for jurisdiction in pursuing legal action. The SEC accused Sun and affiliated companies of conducting unregistered offers and sales of BTT and TRX tokens.
Sun’s US Visits
According to the regulator, Sun made extensive travels to the US, spending more than 380 days in the country between 2017 and 2019. He conducted business trips to major cities such as New York City, Boston, and San Francisco, representing both the Tron Foundation and the BitTorrent Foundation – entities also involved in the legal case. The SEC is leveraging these visits to establish jurisdiction over Sun and the respective companies for regulatory proceedings in the US.
Wash Trading Allegations
In addition to the jurisdictional argument, the SEC accused Sun and the companies of engaging in a wash trading scheme on Bittrex, a now-defunct cryptocurrency exchange based in the US. The amended complaint specifically highlighted Sun’s personal communications with Bittrex in 2018 to facilitate the listing of the TRX cryptocurrency. These interactions, along with signed documents linking Sun to the companies, further solidify the SEC’s case.
Response to Dismissal Request
The amended complaint addresses Sun’s previous request to dismiss the SEC case, which cited a lack of personal jurisdiction. Sun’s defense argued that as a foreign national, he was not subject to US jurisdiction. The allegations in the complaint counter these claims, emphasizing the connections between Sun and US-based entities like Bittrex, crucial for establishing legal grounds for the case.
In a separate development, the SEC had originally sued Sun and other defendants in March 2023, focusing on jurisdictional claims tied to investor activities in the Southern District of New York and interactions with US individuals through social media. Following a subsequent lawsuit against Bittrex in April 2023 and a subsequent settlement in August 2023, the exchange ceased operations globally by the end of the same year.
While the legal proceedings continue to unfold, the SEC’s amended complaint underscores the complexities of international jurisdiction in cases involving cryptocurrency offerings and exchanges, with far-reaching implications for the regulatory landscape in the digital asset space.
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