- The SEC has amended its lawsuit against Tron founder, Justin Sun, alleging he engaged in the promotion and sale of unregistered securities to US investors when he was inside the US.
- Sun had previously sought to have the lawsuit thrown out because the SEC lacked jurisdiction; this amendment strengthens the regulator’s claim to have jurisdiction over Sun’s conduct.
- SEC also alleges Sun engaged in fraudulent wash trading of TRX and BTT using the US-based exchange, Bittrex.
The US Securities and Exchange Commission (SEC) has amended its lawsuit against the founder of the Tron blockchain, Justin Sun, alleging that he promoted tokens it says are unregistered securities to US-based investors during time he spent inside the US over a number of years.
Sun had previously sought to have the suit thrown out, claiming his conduct was focussed on non-US investors and therefore beyond the jurisdiction of the SEC. This amendment refutes that claim and strengthens the SEC’s argument that his actions do fall within the US regulator’s jurisdiction.
Related: SEC Seeks Public Feedback on Filings of Proposed Ethereum ETFs, Sparks Investor Excitement
Amendment Not Good News For Sun
The amended lawsuit alleges Sun, along with the Tron Foundation, BitTorrent Foundation and RainBerry Inc.:
- Promoted the tokens TRX and / or BTT to investors inside the US.
- Sold these tokens to investors inside the US in unregistered securities transactions.
- Engaged in fraudulent ‘wash trading’ of these tokens to manipulate their prices using Bittrex, a US-based crypto exchange.
The SEC also alleges Sun himself directly promoted and sold these tokens to US-based investors while he was inside the country on lengthy business trips throughout 2017, 2018 and 2019:
During the course of his work on behalf of the Tron Foundation, the BitTorrent Foundation, and/or Rainberry, Sun traveled extensively to the United States during the time that TRX and BTT were promoted, offered, and sold.
SECRelated: Tron Founder Justin Sun Just Bought These Altcoins
The SEC’s original suit against Sun, filed in March 2023, alleged the crypto founder’s sales of TRX and BTT tokens were illegal sales of unregistered securities — similar to many other crypto cases we’ve seen. Sun had sought to have this lawsuit thrown out claiming the SEC lacked jurisdiction, saying the US regulator “is not a worldwide regulator” and that it was targeting “predominantly foreign conduct.”
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