Tron Rejects SEC's Global Jurisdiction Claims, Declares Lawsuit Excessive

Tron has filed a motion to dismiss a lawsuit from the Securities and Exchange Commission (SEC), asserting that the regulatory agency overstepped its global jurisdiction. Tron contends that the SEC targeted international activities beyond its authority, as the sale of Tron and BitTorrent tokens occurred primarily outside the US.

Tron Counters SEC's Global Jurisdiction Claims, Dismisses Lawsuit as Overreach

In a bold move, Tron, the company behind the popular blockchain platform, has filed a motion to dismiss a lawsuit brought by the U.S. Securities and Exchange Commission (SEC), arguing that the regulator has overstepped its boundaries by attempting to apply U.S. securities laws to largely international activities.

Tron, headquartered in Singapore, asserts that the SEC lacks global jurisdiction over the sale of its tokens, Tron (TRX) and BitTorrent (BTT), which were primarily conducted outside the United States. The company emphasized that it took measures to prevent the sale of these tokens to U.S. residents and that there is no evidence of any U.S. investors being involved in the initial offerings.

"The SEC's claims that subsequent token sales on a U.S.-based platform constituted unregistered U.S. securities are flimsy at best," Tron stated in its motion.

Furthermore, Tron contends that even if the SEC had jurisdiction, the tokens would not meet the criteria of investment contracts, as defined by the Howey test, which is used to classify securities in the United States. Tron argues that the tokens were sold as a utility, not as an investment opportunity, and therefore do not fall under the SEC's regulatory purview.

Tron also dismissed the SEC's allegations that its founder, Justin Sun, engaged in wash trading and paid celebrities to promote the tokens without disclosing his involvement. The company asserted that the SEC failed to provide specific evidence to support these claims and relied heavily on vague generalizations and conclusions.

"The SEC purports to allege fraud, but no material misstatement is alleged, leaving Defendants to speculate on the precise basis for those claims," Tron wrote in its motion.

Tron's dismissal motion is supported by the major questions doctrine, a recent Supreme Court ruling that requires significant issues to be addressed by Congress, not regulatory agencies. Tron argues that the SEC's attempt to regulate crypto projects without explicit Congressional authorization is an unlawful overreach of its powers.

Other crypto firms, such as Kraken and Coinbase, have also employed the major questions doctrine in their legal battles against the SEC, asserting that the commission's unilateral enforcement of securities laws on crypto assets is an unconstitutional assumption of legislative authority.

The SEC has yet to respond publicly to Tron's dismissal motion, but the company's bold challenge to the regulator's jurisdiction and authority is likely to have significant implications for the future of cryptocurrency regulation in the United States.

Meanwhile, Tron continues to innovate and expand its ecosystem. The company recently unveiled its Bitcoin Layer 12 solution, aimed at facilitating Bitcoin transactions on the Tron blockchain. Tron founder Justin Sun has also expressed his intention to bring the memecoin mania to the Tron blockchain, further demonstrating the company's commitment to staying at the forefront of the cryptocurrency industry.