Crypto News – In an attempt to apply U.S. security laws to “predominantly foreign conduct,” the Tron Foundation claimed in a March 28 dismissal motion in a New York federal court that “the SEC is not a worldwide regulator” and that doing so goes “too far.”
Tensions Rise in Tron vs. SEC Case: The Foundation Argues That The Agency Is Not A Worldwide Regulator
The Tron Foundation, BitTorrent Foundation, Sun, and its parent company Rainberry Inc., based in San Francisco, were sued by the SEC in March because their sales of Tron and BitTorrent (BTT) tokens constituted unregistered securities offerings. In its request, Tron claimed that the SEC lacked jurisdiction to bring legal action against “foreign digital asset offerings to foreign purchasers on global platforms.”
According to Tron, the tokens do not pass the Howey test, which is used to classify securities in the United States, even if the SEC had enforcement authority. The SEC further stated in its lawsuit that Sun participated in manipulative wash trading, which is the practice of buying and selling a token to mimic market activity. Akon and Soulja Boy are two examples of the celebrities that Sun, a Grenadian citizen of Chinese descent, allegedly paid surreptitiously to promote the tokens.
No particularized facts show that the trades were actually ‘wash trades,’ wrongfully executed for illegitimate purposes (much less affecting anyone in the United States). The SEC also does not allege a single victim,
Tron’s motion
SEC Response Expected in Two Weeks
Among Tron’s other contentions was that the SEC relied on generalizations and conclusions to bolster its already flimsy, often indiscernible charges, and neglected to provide specific factual allegations or to outline each defendant’s role in each claim. Within two weeks, the SEC is expected to submit its own response to Tron’s move.
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
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