The United States regulatory watchdog, the Securities and Exchange Commission (SEC), has revisited its lawsuit against Justin Sun, the founder of Tron to include other entities. The lawsuit’s amended document highlights Sun’s extensive travels within the U.S., which the SEC asserts validate its jurisdictional claim. The case which has been on for over a year, since March 2023, gets a new twist with this revision and inclusion of other entities like the Tron Foundation and BitTorrent Foundation.
The Updated Lawsuit
The regulatory agency claims that it has jurisdiction over Sun because of his prolonged stay in the US, where he was present for more than 380 days between 2017 and 2019. According to the updated lawsuit, Sun spent over 80 days in 2017, more than 120 days in 2018, and about 180 days in the United States in 2019 signifying his deliberate intention to target U.S. investors.
Important cities like New York City, Boston, and San Francisco were visited during these trips. In addition, the Tron Foundation and the BitTorrent Foundation, two of Sun’s connected organizations, are named in the SEC action, maintaining that Sun controlled both.
“During Sun’s business trips to the United States in 2019, he spent time in various cities, including New York City, Boston, Massachusetts, and San Francisco. Rainberry also rented an apartment where Sun stayed during some of his business trips to the United States in 2019,” the lawsuit stated.
Furthermore, the SEC repeated its accusation against the embattled founder, stressing the sales of unregistered securities through Tron (TRX) and BitTorrent tokens (BTT). It also pointed out Sun’s involvement in manipulative wash trading.
“Sun also directed the manipulative wash trading of TRX to create the artificial appearance of legitimate investor interest and keep TRX’s price afloat. Sun accomplished this wash trading through the Tron Foundation, whose employees conducted the trades at Sun’s direction; the BitTorrent Foundation, which, together with the Tron Foundation, owned and controlled nominee accounts used in the trading; and Rainberry, whose employees transferred funds to facilitate the trading and opened at least one nominee account used in the trading,” the lawsuit stated.
Sun Says SEC Lacks Jurisdiction
Meanwhile, in a significant response to the SEC in late March, Sun refuted the regulator’s allegations. He claimed on behalf of the Singapore-based Tron Foundation that the SEC had no jurisdiction over him and that it was inappropriate for the agency to apply U.S. securities law to actions that were mostly conducted abroad.
Sun stated that intentional steps were taken to avoid the U.S. market and that all TRX and BTT token sales were made overseas. At the time of writing, Sun’s legal team has remained quiet, ignoring requests for comments.
