Tron, the organization behind the creation of layer-1 blockchain Tron, has challenged a lawsuit brought against them by the United States Securities and Exchange Commission (SEC). Tron recently filed a motion to dismiss the case in a New York federal court, arguing that the SEC has no jurisdiction over “foreign digital asset offerings to foreign purchasers on global platforms.”
The lawsuit, lodged by the SEC in March, implicated Tron Foundation, its figurehead, Justin Sun, file-sharing outfit BitTorrent Foundation, and the latter’s parent company, Rainberry Inc. The core accusation in the lawsuit is that Tron and BitTorrent’s token sales constitute unregistered securities offerings. Tron, however, rebuts the SEC’s claim, contending that the tokens were sold wholly overseas, with precautions being put in place specifically to avoid the United States market.
Notably, Tron also asserted that, even if the SEC did have jurisdiction, the tokens would not be classified as investment contracts under the U.S. securities standards, or the Howey test. The company also contested the SEC’s allegations that Justin Sun engaged in manipulative wash trading and secret payments to celebrities for token promotion, stating there was a lack of detailed allegations or any named victims.
The SEC, in response to Tron’s dismissal motion, is expected to file their own argument within the next fortnight. As of now, the SEC has not made any official comment on Tron’s dismissal motion.