SEC Expands Lawsuit Against Tron's Justin Sun, Citing US Presence and Fraud Allegations

The Securities and Exchange Commission (SEC) has amended its lawsuit against Tron founder Justin Sun, including other entities and alleging his prolonged stay in the U.S. validates its jurisdiction. The updated complaint highlights Sun's travels within the U.S. between 2017-2019, with over 380 days spent in the country, targeting U.S. investors through unregistered security sales of Tron (TRX) and BitTorrent tokens (BTT).

SEC Expands Lawsuit Against Justin Sun and Affiliated Entities in Tron Cryptocurrency Case

The United States Securities and Exchange Commission (SEC) has amended its lawsuit against Justin Sun, the founder of the Tron cryptocurrency platform, to include additional entities and strengthen its jurisdictional claims. The updated complaint alleges that Sun's extensive travels within the U.S. validate the agency's authority to regulate his alleged misconduct.

Extended Presence in the United States

The SEC asserts that Sun's prolonged stay in the U.S. between 2017 and 2019 provides sufficient grounds for its jurisdiction. The amended lawsuit meticulously details Sun's presence for over 80 days in 2017, 120 days in 2018, and approximately 180 days in 2019 within U.S. borders. This extensive stay, the agency argues, demonstrates Sun's deliberate intention to target U.S. investors.

Targeted Cities and Connected Entities

During these trips, Sun visited major cities such as New York City, Boston, and San Francisco, according to the complaint. Additionally, the Tron Foundation and the BitTorrent Foundation, two organizations connected to Sun, are now named as defendants in the SEC's action. The SEC alleges that Sun exerted control over both entities.

Unregistered Securities and Manipulative Trading

The SEC reiterates its accusations against Sun, alleging that he sold unregistered securities through the issuance of Tron (TRX) and BitTorrent tokens (BTT). Furthermore, the complaint emphasizes Sun's involvement in manipulative wash trading to artificially inflate the value of TRX.

"Sun also directed the manipulative wash trading of TRX to create the artificial appearance of legitimate investor interest and keep TRX's price afloat," the lawsuit states. "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."

Sun Disputes Jurisdiction

In a defiant response to the SEC's amended lawsuit, Sun has vehemently denied the agency's allegations. Through the Singapore-based Tron Foundation, Sun claims that the SEC lacks jurisdiction over his actions and that the application of U.S. securities law to activities conducted largely overseas is inappropriate. Sun insists that deliberate measures were taken to avoid the U.S. market and that all TRX and BTT token sales occurred outside U.S. borders.

Ongoing Legal Battle

At the time of writing, Sun's legal team has not yet provided comment on the amended lawsuit. The case is expected to proceed through the court system, with the SEC seeking to prove its jurisdictional claims and Sun contesting the agency's authority. The outcome of this lawsuit will have significant implications for the regulation of cryptocurrency platforms and the scope of the SEC's jurisdiction in international markets.