Tron, the entity behind the layer-1 blockchain technology, has taken a bold stance against the United States Securities and Exchange Commission (SEC), arguing that the regulator’s jurisdiction does not extend globally. In a recent development, Tron has filed a motion in a New York federal court seeking the dismissal of a lawsuit brought forth by the SEC. The lawsuit alleges that Tron, along with associated entities, engaged in the sale of unregistered securities. However, Tron contends that the SEC’s attempt to apply U.S. securities laws to predominantly foreign transactions is excessive and unwarranted.
Tron’s Motion Challenges SEC’s Jurisdiction
Tron’s motion challenges the SEC’s assertion of authority over foreign digital asset offerings conducted on global platforms. The foundation argues that since the transactions in question were primarily targeted at foreign purchasers and executed on international platforms, the SEC lacks jurisdiction. Tron emphasizes that the tokens in question were sold exclusively overseas, with deliberate measures taken to avoid the U.S. market. Moreover, Tron asserts that the SEC has not provided evidence to suggest that the tokens were initially offered or sold to U.S. residents.
Tron further contends that the SEC’s claims regarding secondary token sales on a U.S.-based platform are dubious. Despite serving users worldwide, Tron argues that labeling these transactions as unregistered U.S. securities is unfounded. Additionally, Tron challenges the classification of the tokens as investment contracts under the U.S. securities classification, citing the inadequacy of the Howey test in this context.
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Defending Against Allegations
In its motion, Tron refutes specific allegations made by the SEC, including accusations of manipulative trading practices and undisclosed payments to celebrities for token promotion. Tron argues that the SEC’s claims lack sufficient factual basis and fail to demonstrate any wrongdoing that would warrant legal action. Moreover, Tron highlights the absence of alleged victims in the SEC’s case, further undermining the regulator’s claims.
Tron also criticizes the SEC’s lawsuit for its lack of detailed factual allegations and reliance on generalizations and conclusions. The foundation argues that the SEC’s case fails to clearly outline each defendant’s role in the alleged misconduct, leaving room for speculation. Furthermore, Tron invokes the major questions doctrine, citing Supreme Court precedent to support its argument that Congress should be the authority to pass laws, not regulators like the SEC.
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Conclusion
Tron’s decision to challenge the SEC’s lawsuit marks a significant development in the ongoing regulatory scrutiny facing the cryptocurrency industry. By asserting that the SEC’s jurisdiction does not extend to predominantly foreign transactions, Tron is challenging the global reach of U.S. regulatory authorities. As the legal battle unfolds, the outcome of Tron’s dismissal motion will likely have implications not only for the specific case but also for the broader regulatory landscape governing digital assets.
