Business

SEC Updates Complaint Against Justin Sun – Crypto News

Published

1 year ago

April 20, 2024

Dripp

The Securities and Exchange Commission (SEC) has submitted an amended complaint underlining the U.S. jurisdiction over Justin Sun, founder of the Tron Foundation, because of his significant presence and investment activities in the United States. This legal refinement is part of the ongoing lawsuit initiated by the SEC in March 2023, where Sun and his affiliated companies are accused of selling and offering unregistered securities.

According to the updated filings, Justin Sun spent a significant amount of time in the United States between 2017 and 2019, totaling 380 days. During this period, Sun was a very active player in promoting and running activities associated with the Tron and BitTorrent tokens, also known as TRX and BTT.

The complaint by the SEC provides details of Sun’s accommodations in major cities like New York, Boston, and San Francisco and an apartment leased by his former company Rainberry, previously known as BitTorrent, which was his residence as he traveled during 2019.

Justin Sun Legal Challenges and Defenses

The fact that the SEC is going after Sun depends on his actions of promoting his activities to U.S. investors using different promotional methods such as celebrity endorsements and public appearances. According to the SEC, the acts are subject to the U.S. securities legislation because they are targeted toward the American investors, and the transaction is executed within the country.

In defense, Sun’s legal team has contested the SEC’s jurisdiction, claiming that the regulator is trespassing on its borders by trying to apply U.S. securities laws to largely foreign activities. They argue that the transactions in question were carried out beyond the U.S. borders and, as such, should not be treated under the SEC’s jurisdiction.

This legal position reflects a wider dispute within the crypto ecosystem concerning how far the U.S. regulatory authority extends over international crypto operations.

Details from the Amended Complaint

The amended complaint by the SEC multiples the original accusations, pointing out the kind of violations that Sun was supposed to commit. The document claims that Sun was the architect of a marketing plan that was built on a lot of appearances and endorsements to create investor interest and trading activity around TRX and BTT. These included collaborations with celebrities who advertised the tokens without eligible disclosures, deceiving the potential investors about the type of their endorsements.

Sun is also charged by the SEC with conducting activities that are designed to manipulate the market for these tokens, whereby they are said to have had orchestrated trades that were intended to increase the transaction volume and, by extension, the token prices.

These allegations are part of a broader scrutiny under which the crypto industry finds itself, with regulatory bodies looking to clamp down on what they perceive as widespread irregularities and violations of securities laws.