According to the SEC filing, Justin Sun, through several companies he owns and controls, executed the offer and sale of two crypto assets considered “securities” by the US SEC.

The United States Securities and Exchange Commission (SEC) has filed new court documents in its ongoing lawsuit against Justin Sun, the founder of the TRON blockchain, and the companies he allegedly owns and controls.

The SEC’s latest filing provides additional information to support its previous allegations made in March 2023. The SEC accuses Sun of orchestrating unregistered offers and sales, “manipulative trading,” and “unlawful promotion of crypto asset securities.”

Sun “Has Traveled Extensively” Throughout US: the SEC Has Jurisdiction

The SEC argues that it has “personal jurisdiction” over Sun, Tron and two other companies it controls because they “intentionally carried out actions in the United States and directed at this country.” it wrote in an amended complaint filed April 17 with a Manhattan federal court.

Sun spent a total of more than 380 days in the United States between 2017 and 2019 on business trips to New York, Boston and San Francisco, the SEC alleged.

Justin Sun Accused of Orchestrating a ‘Manipulative Laundering Trade’

According to the SEC, Sun, through several companies, including Tron Foundation Limited, BitTorrent Foundation and Rainberry, executed the offer and sale of TRX, Tron. BitTorrent native token and BTT.

The SEC argues that these offers and sales should have been registered with the SEC or qualified for an exemption, but no such registration or exemption was filed. Sun is alleged to have engaged in public offerings and sales of TRX and BTT without complying with regulatory requirements.

The SEC also accuses Justin Sun of running a “manipulative laundering business” of TRX to create a “false appearance” of legitimate investor interest and maintain the price of the token.

The Tron Foundation, the BitTorrent Foundation, and Rainberry, along with their employees, allegedly facilitated wash trading under Sun’s instructions. This involved conducting “hundreds of thousands” of laundering transactions between accounts controlled by Sun without any genuine change of ownership or legitimate economic purpose.

SEC Seeks Restitution and Sanctions

In addition to the allegations mentioned above, Justin Sun is accused of materially misrepresenting the truth about the promotional campaign to allegedly mislead investors.

The SEC notes that Sun falsely claimed on social media that any celebrity promoting TRON must disclose their compensation. However, the SEC alleges that Sun himself arranged undisclosed payments to celebrities involved in promoting TRON, indicating a violation of anti-promotion provisions.

The SEC claims that the TRON founder’s actions violated several provisions of the Securities Act of 1933 and the Securities Exchange Act of 1934. These include registration and anti-fraud provisions, anti-manipulation rules, and aiding and abetting violations.

In its petition for relief, the SEC asks the court to find the defendants responsible for the alleged violations, impose permanent restrictions and injunctions based on conduct, prohibit Justin Sun from acting as an officer or director of certain “entities securities,” order the disgorgement of ill-gotten gains with prejudgment interest, impose civil monetary penalties, and grant any additional relief deemed necessary to protect investors.

The SEC’s new court filing against Justin Sun and his associated companies intensifies the legal battle surrounding allegations of unregistered offerings, manipulative trading, and deceptive promotion of cryptoassets.

As the case progresses, the outcome will likely have significant impact and notable implications on the digital asset regulatory landscape.

The native token of the TRON blockchain, TRX, is trading at $0.1110. It broke its month-long bearish trend with a 1.4% price increase in the last 24 hours.

By Leonardo Perez


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