Justin Sun’s US Visits Come Back to Haunt Him in SEC Lawsuit

Table of Contents

• TLDR

The United States Securities and Exchange Commission (SEC) has filed an amended complaint in its ongoing lawsuit against Tron founder Justin Sun, asserting that it has “personal jurisdiction” over him and his associated companies due to their extensive activities directed toward the US.

The move comes after Sun sought to dismiss the suit last month, arguing that the regulator had no jurisdiction over him or the Singapore-based Tron Foundation.

TLDR

• The SEC has amended its lawsuit against Justin Sun, claiming it has “personal jurisdiction” over him and his companies due to their actions directed toward the US.
• Sun allegedly spent over 380 days in the US between 2017 and 2019, making business trips to New York City, Boston, and San Francisco on behalf of the Tron Foundation, BitTorrent Foundation, and Rainberry.
• The SEC claims that TRX and BTT tokens were promoted, offered, and sold to consumers and investors in the US, and Sun’s alleged wash trades took place on the Seattle-based crypto exchange Bittrex.
• In March, Sun sought to dismiss the suit, arguing that the SEC had no jurisdiction over him or the Singapore-based Tron Foundation, as the tokens were sold “entirely overseas” and steps were taken to avoid the US market.
• The amended complaint addresses Sun’s request for dismissal by highlighting his extensive travel to the US and his personal communication with Bittrex to list the TRX crypto.

In the amended complaint filed with a Manhattan federal court on April 17, the SEC claims that Sun and his businesses, including the Tron Foundation, BitTorrent Foundation, and Rainberry,

“purposefully took actions in and directed toward the United States.”

The regulator alleges that Sun spent over 380 days in the US between 2017 and 2019, making business trips to major cities such as New York City, Boston, and San Francisco on behalf of these companies.

The SEC’s amended suit reiterates its previous allegations that Sun and his businesses sold unregistered securities through the Tron (TRX) and BitTorrent (BTT) tokens and that Sun engaged in “manipulative wash trading.”

The regulator emphasizes that these tokens were promoted, offered, and sold to “consumers and investors located in the United States,” and that “Sun traveled extensively to the United States during the time that TRX and BTT were promoted, offered, and sold.”

The SEC claims that Sun’s alleged TRX wash trades took place on the Seattle-based crypto exchange Bittrex. This detail is significant, as it further strengthens the regulator’s argument for jurisdiction over the case.

In late March, Sun, a Chinese-born Grenadian citizen, sought to dismiss the suit, contending that the SEC had applied US security laws to “predominantly foreign conduct” and had no jurisdiction over him or the Singapore-based Tron Foundation.

Sun’s lawyers argued that the TRX and BTT tokens were sold “entirely overseas” and that steps were taken to avoid the US market. They also noted that the SEC did not allege the tokens “were offered or sold initially to any U.S. residents.”

The SEC’s amended complaint directly addresses the concerns raised in Sun’s request for dismissal. By highlighting Sun’s extensive travel to the US and his alleged involvement in promoting and selling the tokens to US-based consumers and investors, the regulator aims to establish a clear link between Sun’s activities and the United States.

The amended complaint reveals that Sun personally communicated with and provided documents to Bittrex around 2018 to have the exchange list the TRX crypto.

This allegation further supports the SEC’s claim of personal jurisdiction over Sun and the other defendants, as it demonstrates Sun’s direct engagement with a US-based exchange.

If the court accepts the SEC’s argument for personal jurisdiction based on Sun’s US visits and alleged involvement in promoting and selling tokens to US investors, it could set a precedent for future regulatory actions against individuals and companies operating in the crypto space.

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