SEC amends case against Justin Sun to establish jurisdiction
The SEC alleges that Justin Sun spent nearly 400 days in the US from 2017 to 2019
SEC Chair Gary Gensler | Muhammad Alimaki/Shutterstock modified by Blockworks
The Securities and Exchange Commission amended its complaint against Justin Sun on Thursday evening.
The complaint, filed initially in March 2023, alleges that the founder of Tron’s network sold unregistered securities.
In the amended complaint, the SEC alleges that Sun traveled “extensively” to the US on behalf of Tron, BitTorrent and Rainberry.
“Specifically, Sun spent more than 80 days in the United States in 2017, more than 120 days in the United States in 2018, and approximately 180 days in the United States in 2019. During Sun’s business trips to the United States in 2019, he spent time in various cities, including New York City, Boston, Massachusetts, and San Francisco,” the SEC added to its complaint on Thursday.
As part of the regulator’s approach to establish jurisdiction, the Commission added that Sun — who is not a US citizen — broadcasted a livestream from the San Francisco office which allegedly promoted the Tron ecosystem.
Read more: SEC sues Tron network founder for allegedly selling securities
“During the livestream, Sun explained that BTT would benefit TRX holders because ‘the current Tron community’ would be allocated with BTT, meaning that TRX holders would be ‘entitled’ to receive ‘the BTT airdrop.’ Sun stated that, because of the relationship between TRX and BTT, ‘the TRX community [was] tied with the BTT community,’” the complaint claims.
The SEC’s amended filing pushes back against Sun’s lawyers, who previously tried to claim — in a motion to dismiss filed earlier this year — that the SEC’s claims were “out of the SEC’s regulatory reach.” The Commission, the motion added, failed to establish “personal jurisdiction over each foreign defendant for each claim.”
“This case originates with foreign digital asset offerings to foreign purchasers on global platforms,” the lawyers wrote.
Read more: Circle cites compliance as it discontinues USDC on Tron
The SEC’s initial complaint alleged that Sun distributed billions of both TTX and BTT tokens to the public, and created secondary markets to trade the assets. In an argument similar to what we’ve seen from the SEC in other cases that they’ve brought against crypto firms, the Commission said Sun needed to register the sales but failed to.
Alongside the press release at the time, the SEC accused Sun of “fraudulently manipulating the secondary market for TRX through extensive wash trading.”
The SEC, outside of its focus on Sun, settled with eight celebrities last year, including Lindsey Lohan, for promoting the tokens.
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