"Come to the U.S. more often!" SEC asserts jurisdiction over TRON founder Justin Sun

The legal dispute between the founder of Tron, Justin Sun, and the U.S. Securities and Exchange Commission (SEC) is intensifying, with the regulatory agency amending its litigation claims to assert its jurisdiction based on Sun's frequent visits to the United States. This comes after Sun recently attempted to dismiss the SEC's lawsuit against him, arguing that the SEC lacks jurisdiction over his primarily foreign activities.

Sun is accused by the SEC of fraud, involving unregistered sales and market manipulation related to Tron/BitTorrent.

SEC Claims Jurisdiction through Justin Sun's U.S. Visits

According to the latest court filings on April 17 in the Manhattan federal court, Justin Sun's regular travels to the U.S. have been cited as a key factor in establishing jurisdiction. Regulators argue that Sun, along with his controlled entities Tron and two others, "intentionally acted in and targeted the United States," thereby legitimizing the SEC's oversight.

Between 2017 and 2019, Sun spent over 380 days on business trips in major U.S. cities such as New York City, Boston, and San Francisco. The SEC contends that these travels were directly related to activities of the Tron Foundation, BitTorrent Foundation, and Rainberry, organizations described as Sun's "alter egos" and central to the ongoing litigation.

Unregistered Securities and Market Manipulation Allegations

The core of the SEC's allegations remains Sun and his related companies selling unregistered securities through Tron's TRX token and BitTorrent's BTT token. Additionally, the Commission accuses Sun of engaging in manipulative trading practices through self-trading with TRX tokens on the Bittrex exchange in Seattle.

The SEC emphasizes that these tokens were actively promoted and sold within the U.S. during Sun's visits, linking his physical presence to the alleged regulatory violations. This strengthens their argument of having full jurisdiction, countering Sun's claim that the token sales were conducted "completely overseas" and avoided the U.S. market.

Justin Sun's Defense and Legal Strategy

In his defense, Chinese-born, Grenada citizen Justin Sun argues that the SEC improperly applies U.S. securities laws to foreign activities. His legal team points out that the initial issuance of TRX and BTT tokens was not targeted at U.S. residents, suggesting an intention to avoid U.S. jurisdiction. As the legal proceedings unfold, Sun's response to the amended lawsuit complaint remains pending. His lawyers have not publicly commented on the latest developments yet.