The United States Securities and Exchange Commission (SEC) has edited its Tron lawsuit against Justin Sun and his crypto companies, Tron Foundation, the BitTorrent Foundation, and Rainberry, following his attempted dismissal of the litigation late last month, amended court docs filed on Thursday reveal.
Tron Lawsuit Edited After Justin Sun’s Attempted Dismissal
In the updated court filings, the SEC claims that the Tron founder “traveled extensively” to the U.S. throughout “his work on behalf of the Tron Foundation, the BitTorrent Foundation, and/or Rainberry.”
Big news in the crypto world! SEC revamps lawsuit against Tron founder Justin Sun for alleged sale of unregistered securities via Tron and BitTorrent tokens. Sun denies allegations, challenging SEC’s jurisdiction. Complex legal battle ahead in the cryptocurrency industry.
— Kelvin Zinck (@KelvinZinck) April 19, 2024
The original lawsuit alleges Sun and the aforementioned crypto entities broke federal law by offering and selling unregistered securities in the form of Tronix (TRX) and BitTorrent (BTT).
In his March dismissal, Sun largely argued that the federal agency was overstepping its authority in attempting to prosecute him, citing jurisdictional overreach.
“The SEC is not a worldwide regulator,” lawyers for Sun wrote in the March 28th dismissal. “Its efforts to leverage highly attenuated contacts to the United States, to extend U.S. securities laws to cover predominantly foreign conduct, go too far and should be rejected.”
In addition to Sun, several notable celebrities including Lindsay Lohan, Jake Paul, and Austin Mahone, were charged “for illegally touting TRX and/or BTT without disclosing that they were compensated for doing so.”
SEC Presses Forward with Crypto Crackdown
The SEC’s amended lawsuit against Tron arrives amidst growing criticism of its “regulation-by-enforcement” approach to the crypto industry.
Critics argue that the SEC has failed to establish a clear regulatory framework for cryptocurrencies, opting instead to pursue legal action against key industry players.
Sun’s March dismissal motion challenges the SEC’s jurisdiction and asserts that neither TRX nor BTT qualify as investment contracts or securities.
Under Chair Gary Gensler, the SEC has pursued lawsuits against major crypto entities like Coinbase, Ripple, and Binance, alleging violations of federal securities laws.
Coinbase recently attempted to dismiss its case, arguing that the SEC’s claims regarding selling unregistered securities exceed the agency’s authority.
However, U.S. District Court Judge Katherine Polk Failla ruled in favor of the SEC, allowing the lawsuit to proceed.
And we’re not done.
On our agenda: further equity market structure rules and additional cybersecurity rules, among others.
— Gary Gensler (@GaryGensler) April 17, 2024
Despite mounting pushback, the commission shows no signs of slowing down. In a recent X post, Gensler outlined the SEC’s ongoing agenda, which includes further equity market structure rules and additional cybersecurity regulations.
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