The U.S. SEC has intensified its legal actions against Justin Sun, the founder of Tron, citing his substantial presence in the United States as a basis for jurisdiction. According to the SEC, Sun was in the U.S. for over 380 days across 2017 to 2019, visiting key cities such as New York, Boston, and San Francisco. This frequent travel is part of the reason the SEC believes it can legitimately pursue legal action against him.
In its revised legal complaint, the SEC outlines accusations that Sun engaged in manipulative trading practices to inflate the trading volume and price of the TRX token. The agency specifically points to instances of wash trading, a form of market manipulation where trades are executed to give a misleading impression of market demand without actual position changes.
Details of the SEC’s Allegations
The SEC’s focus extends to Sun’s interactions with the Bittrex exchange, where TRX was listed. Sun’s direct involvement included communications with Bittrex’s team in 2018 and signing several important documents concerning the company’s operations. The SEC emphasizes that Bittrex, being U.S.-based, further substantiates their jurisdiction over the case due to the geographical and operational ties.
Previously, Bittrex faced SEC allegations and settled by agreeing to pay $24 million in August 2023. This settlement followed an unsuccessful challenge of the SEC’s authority to oversee cryptocurrency operations.
Additionally, in March 2023, the SEC charged Sun and three associated companies with the unregistered offering of securities. This included tokens for both Tron and BitTorrent, intensifying the scrutiny around Sun’s cryptocurrency ventures.
This ongoing legal battle highlights the SEC’s increasing involvement in regulating the cryptocurrency space, particularly focusing on activities connected to the U.S., regardless of the global nature of digital currencies. The outcome of this case could have significant implications for cryptocurrency regulation and how international crypto businesses operate within U.S. jurisdiction.