The United States Securities and Exchange Commission (SEC) has intensified its legal stance against Justin Sun, founder of Tron, by amending its lawsuit.
The agency now claims Sun’s extensive travel and business dealings within the US give it the jurisdiction needed for prosecution.
SEC Makes a Countermove Against Justin Sun’s Claims
The revised lawsuit seeks to establish “personal jurisdiction” over Sun, Tron, and two additional companies he oversees. According to the SEC, these entities purposefully engaged in actions that targeted the US, making this jurisdictional claim a pivotal aspect of the legal proceedings.
During Sun’s visit to key US cities such as New York City, Boston, and San Francisco, he allegedly promoted and managed transactions for Tron (TRX) and BitTorrent (BTT) tokens.
Read more: How To Buy TRON (TRX) and Everything You Need To Know
“Specifically, Sun spent more than 80 days in the United States in 2017, more than 120 days in the United States in 2018, and approximately 180 days in the United States in 2019,” the SEC claims.”
These tokens, the SEC claims, were marketed as unregistered securities to US consumers and investors. Additionally, the regulator accuses Sun of engaging in manipulative wash trading practices on the Seattle-based crypto exchange Bittrex. Such practices artificially inflate asset prices, misleading investors about their true market demand and value.
Despite this development, the impact on the prices of TRX and BTT tokens has been minimal. Over the past 24 hours, the TRX token has dipped slightly by 0.52%, currently trading at $0.10, while BTT has seen a modest increase of 2.5%.
The SEC’s amendment is a countermove to Sun’s attempt to dismiss the March 2023 lawsuit. They argue that their operations, conducted entirely abroad by Singaporean entities, fall outside the SEC’s jurisdiction. This defense emphasizes the international nature of digital assets and current regulatory ambiguities.
The defendants also stress the urgent need for a clear regulatory framework. They argue that without precise regulations detailing when a token is a security and the compliance requirements for token creators, the SEC’s regulatory reach could destabilize the global digital asset market.
Read more: Crypto Regulation: What Are the Benefits and Drawbacks?
This legal confrontation began when the SEC sued Justin Sun and the Tron Foundation for conducting an initial coin offering (ICO) of the TRX token in 2017. The lawsuit also targeted the offering and sale of BTT tokens, which were similarly deemed illegal.
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