Tron SEC Lawsuit Continues With Tron Foundation’s Appeal

Key Points:

• Tron Foundation disputes the SEC lawsuit, citing overreach in foreign regulation.
• The SEC alleges unregistered securities offerings involving TRX and BTT tokens.
• The Tron SEC lawsuit highlights regulatory challenges and implications for cryptocurrency oversight.

The Tron Foundation, the company behind the layer-1 blockchain Tron, has taken legal action against the United States Securities and Exchange Commission (SEC) by filing a request with a New York-based federal court.

Tron SEC Lawsuit Continues Tension With Latest Rebuttals

In their motion to dismiss the Tron SEC lawsuit, the foundation argued that the regulatory agency is overreaching by targeting predominantly foreign conduct.

According to the Tron Foundation, the SEC’s attempt to apply U.S. securities laws to primarily foreign activities exceeds its jurisdictional bounds. In their filing dated March 28, the foundation stated, “The SEC is not a worldwide regulator,” asserting that the SEC’s actions go “too far” in attempting to regulate conduct outside the United States.

The Tron SEC lawsuit in question, filed by the SEC in March 2023, named Justin Sun, the Tron Foundation, the BitTorrent Foundation, and Rainberry Inc. (formerly BitTorrent) as defendants. The SEC alleged that the sale of Tron (TRX) and BitTorrent (BTT) tokens constituted unregistered securities offerings. Furthermore, the SEC accused Sun of orchestrating an extensive wash trading scheme to artificially inflate TRX’s trading volume.

Legal Battle Raises Regulatory Questions in Cryptocurrency Sphere

Among the Tron Foundation’s arguments for dismissal was the SEC‘s failure to provide detailed factual allegations and its reliance on generalizations to support its claims.

Additionally, Tron cited the major questions doctrine, a Supreme Court ruling that suggests Congress should pass laws rather than delegate authority to regulators. This doctrine has been invoked by other crypto firms, including Kraken and Coinbase, in their bids to dismiss SEC lawsuits.