The company at the back of Tron (an L1 blockchain) has filed a request under a New York-based federal court. In that request, the company has asserted that the court should dismiss the lawsuit that the US Securities and Exchange Commission has filed against it. As per the company, the regulatory agency is targeting largely foreign conduct.
Tron Files a Dismissal Request against the SEC Lawsuit, Saying the Agency Has No Authority
In its filing, Tron has noted that the agency does not operate as a global regulator. It added that the SEC’s endeavor to implement the US securities-related laws to mostly foreign conduct is extreme. In this way, Tron Foundation attempted to justify its request in its dismissal motion of the 28th March. Last year, the regulator sued the Tron Foundation, its head “Justin Sun,” and the BitTorrent Foundation (a popular file-sharing platform).
The US SEC accused the defendants of allegedly selling BitTorrent and Tron tokens as unregistered securities. Tron said that the SEC’s lawsuit aims at foreign asset offerings dealing with foreign buyers on worldwide platforms. Hence, it added, the regulatory agency does not have any authority to target these entities. The firm added that it sold the tokens completely overseas while following the steps to sidestep the US market.
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Additionally, the company claimed that the regulator did not accuse it of selling initially to US citizens. According to Tron, even if the agency had the authority, the targeted tokens do not come under the investment contracts. It disclosed that the token does not fulfill the criteria that the Howey test specifies for US securities. In its lawsuit, the SEC also accused Sun of engaging in influential wash trading.
The Company Rejects SEC’s Allegation of Wash Trades
In such trading one platform purchases and trades a token to fake market activity. As per the regulator, the accused allegedly did this to secretly pay celebrities such as Akon and Soulja Boy for token promotion. Tron responded to this by arguing that the agency did not provide any specific facts proving those trades as wash trades. It added that the SEC did not even present a single victim in this respect.