The Tron Foundation reported that the SEC is trying to bring offshore transactions under U.S. rules.
The Tron Foundation is calling for the dismissal of the SEC litigation it is now facing, stating that the agency is trying to apply U.S. rules extraterritorially in an illegal way.
The foundation moved to dismiss the complaint against Tron and BitTorrent, which the U.S. regulator is suing, on March 28. The foundation said that the regulator is overstepping its authority by claiming that the token sales by BitTorrent and Tron were unlawful securities offers.
The Tron Foundation reported that the SEC does not have jurisdiction over all governments throughout the globe. “It goes too far and deserves rejection for trying to use very weak linkages to the US to expand US securities regulations to include mostly international behavior.”
The organization claimed it had taken precautions to guarantee the sale of all assets “overseas,” and that “foreign digital asset offers to foreign buyers on worldwide platforms” are not subject to SEC oversight. Also, the SEC didn’t claim that any U.S. citizens were “offered or sold” tokens, the statement said.
According to the document, the BitTorrent Foundation and the Tron Foundation are both headquartered in Singapore and do not employ anyone in the US. There were accusations of “securities” against two foreign businesses and a foreign citizen, according to the statement.
Justin Sun, the creator of Tron, along with the Tron Foundation, the BitTorrent Foundation, and Rainberry Inc. were all included in the March 2023 SEC case. The lawsuit claimed that Sun and his companies sold BitTorrent (BTT) and Tron (TRX) tokens while participating in the “orchestration of the unregistered offer and sale, manipulative trading, and illegal touting of crypto asset securities.”
The lawsuit also claimed that Sun engaged in over 600,000 wash-trades to artificially inflate the price of TRX from April 2018 to February 2019, and it went after celebrities like Akon, Jake Paul, and Lindsay Lohan for failing to disclose that they had been paid to promote the tokens. All three of them swiftly settled with the SEC for $400,000.
According to Gurbir Grewal, head of the SEC’s Division of Enforcement, “Sun and others employed an age-old playbook to deceive and injure investors by first selling securities without complying with registration and disclosure requirements and then manipulating the market for those same securities.” “Simultaneously, Sun instructed influential people with large online followings to promote the unlicensed products without disclosing their financial connection to the company.”
In its latest submission, the Tron Foundation denies the allegations of wash-trading, claiming that “no particularized facts” demonstrate that the deals in issue were wash-trades or affected anybody in the United States.
