According to a report by Cointelegraph, the entity behind the Layer 1 blockchain Tron has requested the court to dismiss the lawsuit filed against it by the United States Securities and Exchange Commission (SEC), stating that the regulatory body has no jurisdiction over “foreign digital assets sold to foreign buyers on a global platform.”
In a motion to dismiss filed on March 28th with the New York federal court, the Tron Foundation stated that the SEC is not a global regulatory body and its practice of applying US securities laws to “primarily foreign conduct” is excessive and should be dismissed.
In March last year, the SEC sued Tron founder Justin Sun, the Tron Foundation, the BitTorrent Foundation, and its parent company Rainberry, accusing them of selling unregistered securities in the form of Tron (TRX) and BitTorrent (BTT) tokens.
Tron, based in Singapore, argues in its motion that the token sales were “entirely overseas” and took measures to avoid the US market, and the SEC did not allege that the tokens were “initially offered or sold to any US residents.” Tron also argues that even if the SEC has jurisdiction, these tokens cannot be classified as investment contracts under the Howey test.
In the lawsuit, the SEC also claimed that Justin Sun engaged in “manipulative wash trading” and secretly paid celebrities, including Soulja Boy and Akon, to promote the tokens. Tron, in its motion, stated that “there are no specific facts indicating that these transactions were actually ‘wash trades’ conducted for illicit purposes (let alone affecting anyone within the US),” and the SEC did not allege any victims.
