TRON seeks dismissal of SEC suit, claims regulatory overreach beyond US borders
The firm argues that the sales of Tron (TRX) and BitTorrent (BTT) tokens were conducted "entirely overseas" with no US involvement.
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TRON Foundation, a non-profit organization overseeing and supervising the TRON network, has filed a motion to dismiss a lawsuit by the US Securities and Exchange Commission (SEC), citing overreach of the regulator’s authority on a global scale.
The motion, submitted to a New York federal court on March 28, asserts that the SEC’s attempt to apply US securities laws to predominantly foreign activities is inappropriate and excessive.
“The SEC is not a worldwide regulator. Its efforts to leverage highly attenuated contacts to the United States, to extend U.S. securities laws to cover predominantly foreign conduct, go too far and should be rejected,” wrote the TRON Foundation.
The motion is a response to the SEC’s recent claims that the sales of TRON (TRX) and BitTorrent (BTT) tokens were unregistered securities offerings. The SEC also accused TRON of manipulative trading practices and undisclosed payments to celebrities for token promotion.
Refuting the allegations, the TRON Foundation clarifies that its token sales targeted foreign users on a global platform, with measures in place to prevent US residents from participating initially. The foundation also criticizes the SEC’s jurisdictional claims based on secondary sales on US-based platforms and global social media contests and airdrops as weak.
“Undeterred, the SEC seeks to hale the foreign defendants to this Court nonetheless, asserting that later secondary sales on a U.S.-based platform serving users worldwide, and global social media contests, and airdrops of those same digital assets, somehow were “unregistered U.S. securities offerings,” even though the connection to the U.S. forum in each instance is tenuous at best,” stated the TRON Foundation.
The foundation’s argument further points to the fact that both the TRON Foundation and BitTorrent Foundation operate out of Singapore, with no offices or personnel in the US. TRON states these entities do not belong to a US legal action.
Citing “the Supreme Court case Morrison v. National Australia Bank Ltd.,” the TRON Foundation argues that the SEC’s extraterritorial application of US laws to foreign transactions is prohibited, with no legal basis for such an extension.
The foundation has called for the court to dismiss the SEC’s lawsuit due to defective jurisdictional claims and vague accusations, seeking to limit the SEC’s jurisdiction to US borders.
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