Tron Foundation and Justin Sun Defend Against SEC Lawsuit
The Tron Foundation, Justin Sun, and other defendants in the SEC lawsuit are challenging the regulatorโs jurisdiction and regulatory guidance. The case originated from allegations of offering unregistered securities with Tron (TRX) and BitTorrent (BTT) tokens.
The SECโs Stricter Position on Crypto Industry Draws Criticism
Last year, the SEC accused Justin Sun and associated companies of selling unregistered securities since Tronโs ICO in 2017. The regulator also charged celebrities for promoting Sunโs crypto assets illegally. Recently, Sun and the defendants requested a dismissal, criticizing the SECโs crackdown on the crypto sector:
- Claiming the SECโs overreach in regulating digital assets globally
- Emphasizing the unique nature of their blockchain products
- Criticizing the SECโs focus on securities offering rather than technology
TRONโs Arguments for Dismissing the Case
In their motion to dismiss, the defendants cited regulatory uncertainties, inconsistent SEC guidance, and lack of jurisdictional authority over foreign entities. They argued that the SECโs allegations failed to establish a connection between the defendants and US securities laws due to:
- Generalized claims without concrete evidence
- Inaccurate portrayal of global market activities as illicit offerings
- Absence of specifics in fraud allegations against each defendant
Concerns Over Lack of Regulatory Clarity and Due Process
The defendants further criticized the SECโs failure to provide clear directives before TRXโs launch and subsequent enforcement actions. They raised questions about fair notice and the legality of pursuing claims against global platforms, arguing that the complaint lacked specificity and fairness:
- Challenging the SECโs enforcement actions post-TRXโs introduction
- Questioning the SECโs jurisdictional claims over foreign entities
- Highlighting the lack of individual role delineation in the allegations
Dismissal of Complaint Based on Procedural and Jurisdictional Deficiencies
The defendants pointed out procedural flaws in the SECโs allegations, including mischaracterization of global market activities as illicit securities offerings. They argued that even if the SEC could establish jurisdiction, the claims lacked substantial evidence and specificity to hold up in court:
- Noting the SECโs failure to provide adequate factual details in the complaint
- Disputing the SECโs characterization of global market actions as unlawful
- Asserting a lack of fair notice for pursuing claims against defendants
The Way Forward: Seeking Dismissal for Lack of Substantial Evidence
As the legal battle between the Tron Foundation, Justin Sun, and the SEC unfolds, the defendants are pushing for a dismissal based on the regulatorโs procedural missteps and jurisdictional overreach. With a focus on the lack of specific allegations and regulatory uncertainties, the defendants seek to challenge the SECโs case against them.
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