The United States Securities and Exchange Commission (SEC) has revised its lawsuit against Tron founder Justin Sun and his crypto companies, the Tron Foundation, the BitTorrent Foundation, and Rainberry. The SEC alleges that Sun and his entities violated federal law by offering and selling unregistered securities in the form of Tronix (TRX) and BitTorrent (BTT). Sun had attempted to dismiss the lawsuit in March, arguing that the SEC was overstepping its jurisdiction by trying to prosecute him. The amended court filings now claim that Sun traveled extensively to the U.S. while working for the crypto entities.
Aside from Sun, other celebrities including Lindsay Lohan, Jake Paul, and Austin Mahone were charged for illegally promoting TRX and/or BTT without disclosing that they were compensated for doing so. The SEC’s lawsuit against Tron comes amidst criticism of its “regulation-by-enforcement” approach to the cryptocurrency industry. Critics argue that the SEC has not established a clear regulatory framework for cryptocurrencies and has instead chosen to pursue legal action against key industry players. Sun’s dismissal motion challenges the SEC’s jurisdiction and argues that TRX and BTT do not qualify as investment contracts or securities.
Under Chair Gary Gensler, the SEC has filed lawsuits against major crypto entities such as Coinbase, Ripple, and Binance for allegedly violating federal securities laws. Coinbase recently attempted to dismiss its case, claiming that the SEC’s claims of selling unregistered securities exceeded the agency’s authority. However, U.S. District Court Judge Katherine Polk Failla ruled in favor of the SEC, allowing the lawsuit to move forward. Despite facing pushback, the SEC continues to forge ahead with its regulatory actions in the cryptocurrency industry.
In a recent post, Gensler outlined the SEC’s ongoing agenda, which includes implementing further equity market structure rules and additional cybersecurity regulations. The commission’s actions signal its commitment to enforcing compliance with federal securities laws within the crypto space. The regulatory landscape for cryptocurrencies remains uncertain as the SEC navigates legal battles with industry players. Sun and his entities have denied the SEC’s allegations and continue to challenge the commission’s jurisdiction in the legal proceedings. The outcome of the lawsuit against Tron could have significant implications for the cryptocurrency industry as a whole.
