Tron Mounts Robust Defense in SEC Lawsuit Dismissal Motion, Denouncing Extortionate Extraterritorial Overreach

Tron has filed a motion to dismiss a lawsuit brought against it by the SEC, arguing that the regulator lacks authority over predominantly foreign conduct. The SEC's claims are labeled as "tenuous" by Tron, which maintains that the tokens in question were sold overseas and that the secondary token sales on US-based platforms were not unregistered US securities. Tron also argues that the SEC has not provided specific facts to support its allegations and that the case should be dismissed under the doctrine of major questions.

Tron Mounts Robust Defense in SEC Lawsuit Dismissal Motion, Denouncing SEC's Extraterritorial Overreach

In a resounding legal challenge, Tron, the entity behind the popular layer-1 blockchain, has filed a comprehensive motion to dismiss a lawsuit brought against it by the United States Securities and Exchange Commission (SEC). Tron contends that the SEC has grossly overstepped its authority by attempting to regulate predominantly foreign conduct, while also asserting that the agency's claims lack merit.

SEC's Extraterritorial Ambitions Challenged

Tron's motion, filed in a New York federal court, asserts that the SEC lacks the legal authority to enforce U.S. securities laws against largely foreign conduct. Tron emphasizes that the SEC's jurisdiction is not global and that its attempt to apply these laws extraterritorially is an excessive and unwarranted expansion of its authority.

"The SEC is not a worldwide regulator," Tron declares in its motion. "Its effort to apply U.S. security laws to predominantly foreign conduct goes too far."

Tron argues that the SEC's case is primarily focused on foreign digital asset offerings sold to foreign purchasers on global platforms, over which the SEC has no jurisdiction. The motion highlights that the tokens in question were sold overseas, with deliberate measures taken to avoid the U.S. markets. Tron also contends that the SEC has failed to allege that the tokens were initially offered or sold to U.S. residents.

SEC's Claims Deemed Tenuous

Furthermore, Tron dismisses the SEC's assertion that subsequent secondary token sales on U.S.-based platforms serving worldwide users constitute unregistered U.S. securities. Tron argues that even if the SEC had jurisdiction, the tokens do not qualify as investment contracts under the Howey test, the legal standard used to determine whether an asset is a security.

Tron also refutes the SEC's allegations of manipulative wash trading by Tron founder Justin Sun. The motion argues that the SEC has failed to provide specific evidence to support these claims and that the trades in question were legitimate and not intended to mislead or manipulate the market.

Additionally, Tron criticizes the SEC for failing to provide detailed factual allegations against each defendant. The motion contends that the SEC relies heavily on generalizations and conclusions, leaving Tron to speculate on the precise basis for the claims.

"For example, although the SEC purports to allege fraud, no material misstatement is alleged, leaving Defendants (and the Court) to speculate on the precise basis for those claims," Tron argues.

Major Questions Doctrine Invoked

Tron's motion also asserts that the case should be dismissed under the "major questions doctrine," a legal principle established by the Supreme Court that limits the authority of agencies to regulate complex issues without clear congressional authorization. Tron argues that this doctrine applies to the SEC's attempt to regulate digital assets, as Congress has not explicitly granted the agency such authority.

"Congress has not authorized the SEC to regulate digital assets or to apply U.S. securities laws to predominantly foreign conduct," Tron maintains.

SEC Lawsuit Background

The SEC filed its lawsuit against Tron in March 2023, alleging that the company and its founder, Justin Sun, engaged in illegal securities offerings and misleading promotions of Tron tokens. The lawsuit also accuses Sun of using celebrities to promote the tokens without disclosing his involvement.

Investment Disclaimer

Please note that this news article does not constitute investment advice. Readers should always conduct their own independent research and consult with qualified professionals before making any investment decisions.