Tron and BitTorrent Founder Rejects Claims of Selling Crypto to U.S. Investors

Justin Sun, founder of Tron (TRX) and BitTorrent (BTT), vehemently denies allegations by the Securities and Exchange Commission (SEC) that he sold these coins to US investors without registering with the agency. Despite BitTorrent's prominence in the US and Tron's substantial global presence, Sun maintains that ICOs for both projects were held only overseas. However, the SEC contends that Sun and his companies targeted US investors through advertising and celebrity endorsements, potentially resulting in tens of millions of dollars in damages.

Tron and BitTorrent Founder Denies Selling Crypto Assets to US Investors

In a comprehensive legal filing, Justin Sun, the founder of Tron and BitTorrent, has vehemently denied any allegations that his companies sold digital assets to investors residing within the United States. Sun maintains that the initial coin offerings (ICOs) for both projects were solely conducted outside the country's borders.

This assertion stands in apparent contrast to the substantial presence of Tron and BitTorrent in the American market. BitTorrent, a leading peer-to-peer file-sharing protocol, boasts a significant user base in the United States, while Tron has emerged as a prominent player in the global blockchain arena, boasting the highest transaction volume.

Despite this widespread adoption, Sun emphasizes that the companies have meticulously adhered to international regulations, ensuring that all token sales occur outside the United States. This stance is corroborated by the absence of any registered ICOs with the US Securities and Exchange Commission (SEC).

Moreover, Sun contends that the content disseminated through the official social media accounts of BitTorrent, Tron, and himself is predominantly in English, a language widely spoken in the United States. However, he maintains that this linguistic choice does not constitute a direct solicitation of American investors.

Sun's legal filing also addresses the company's sponsorship deals with American celebrities, such as Austin Mahone and Sula Boy. Sun asserts that these partnerships were intended to promote the companies' broader brand visibility and were not specifically designed to influence US investors.

In a decisive move, Sun has filed a motion in the Southern District of New York requesting that the US District Court dismiss the SEC's lawsuit in its entirety. The lawsuit alleges that Sun and his companies engaged in the illegal sale of unregistered securities to US investors through various promotional activities, including celebrity endorsements and airdrop events.

The SEC has estimated that the alleged misconduct resulted in tens of millions of dollars in damages to investors. However, the agency has not yet provided a precise quantification of the losses incurred.

Legal experts anticipate that if the SEC prevails in its case, it will likely seek to recover ill-gotten gains, impose fines, and award damages that could potentially exceed three times the proceeds received from the illegal sale of securities.

Sun, who has refrained from visiting the United States for an extended period, has expressed confidence in the strength of his legal position. He maintains that his companies have acted in full compliance with all applicable laws and regulations.

The outcome of the SEC's lawsuit against Sun and his companies is expected to have significant implications for the cryptocurrency industry, particularly with regard to the regulatory landscape for token sales and the liability of crypto asset issuers.