In an amended complaint against Tron founder Justin Sun, the SEC said his frequent visits to the United States gave rise to legal action.
In March 2023, the regulator accused the entrepreneur and three companies associated with him of an unregistered offering of securities in the form of Tron (TRX) and BitTorrent (BTT) tokens..
The department also believes that the defendants manipulated the TRX secondary market through “wash trading.”
In the motion to dismiss the lawsuit, Sun's representatives noted that the SEC «is not a global regulator». Its efforts to apply U.S. securities laws «to the conduct of predominantly foreign persons» go «too far,» they said.. The founder of Tron, being a native of China, also holds a Grenada passport.
The Commission, in an updated complaint, stated that according to its data, between 2017 and 2019, Sun spent more than 380 days in the United States.
His business trips included major cities such as New York, Boston, Massachusetts and San Francisco. According to the SEC, an entrepreneur with controlled companies “purposefully took actions in the United States directed against them.”
The original lawsuit regarding allegations of TRX wash trading involved an unnamed platform.. This time the Commission clarified that we are talking about the liquidated Bittrex exchange.
According to the SEC, Sun personally communicated with the platform team regarding the listing of TRX in 2018. Many documents related to the companies attributed to him were signed by the entrepreneur personally.
The department considered that the fact that Bittrex is based in the United States also confirms the right of jurisdiction over the defendants.
Recall that the American exchange and its head settled the SEC's claims in August 2023, agreeing to pay $24 million. Prior to this, Bittrex unsuccessfully tried to challenge the agency’s authority to regulate cryptocurrencies.