The SEC does not have the authority to regulate the sale of foreign digital assets to foreign investors on global platforms outside the United States. This is stated in the objection of the Tron Foundation and its founder Justin Sun to the lawsuit filed by the Commission.
In March 2023, the SEC accused the entrepreneur and three related companies of unregistered securities offering in the form of Tron (TRX) and BitTorrent (BTT) tokens.
The agency also noted that Sun and the Tron Foundation, the BitTorrent Foundation and Rainberry (formerly BitTorrent) manipulated the TRX secondary market through "money laundering".
The motion states that the SEC "is not a global regulator."
efforts to apply U.S. securities laws "to the conduct of predominantly foreign individuals" go "too far."
The lawyers asked the New York court to dismiss the claims.
The document claims that the tokens have found buyers "completely abroad." The organizers excluded the American market in order to avoid possible SEC statements that the assets could end up with US residents.
The defendants stressed that the SEC's recognition of secondary token sales "on an American platform serving users around the world" by offering unregistered securities "is unreasonable at best."
The lawyers explained that even assuming the authority of the SEC, the tokens do not fall under the classification of investment contracts in accordance with the criteria of the Howie test.
Sun and related companies have also denied allegations of "money laundering".
"No specific facts confirm the "fictitiousness" of transactions that were wrongfully made for illegal purposes (let alone that they affected anyone in the United States). The SEC also does not provide data on victims," the petition says.
The lawyers pointed out that the SEC failed to detail "the factual allegations, outlining the role of each accused person/organization in each lawsuit" and relied on "generalizations and conclusions to support its already meager, often unclassified accusations."
"For example, although the SEC claims fraud, no material misstatements are given. This forces the defendants (and the court) to speculate about the exact basis of such claims," the lawyers wrote.
Sun and related companies believe that the case should be dismissed in accordance with the doctrine of fundamental issues — the Supreme Court's decision, which states that Congress will pass laws and not empower supervisory authorities. The same arguments were used by Kraken and Coinbase in petitions to dismiss SEC lawsuits.
The SEC must respond to Tron's petition within two weeks.
Earlier, several members of the US House of Representatives sent a letter to the Commission demanding to explain the legality of the broker's cryptocurrency operations in the field of Prometheum digital assets.
In July 2023, Republican U.S. Senator Tommy Tuberville called on the Justice Department and the SEC to investigate Prometheum's activities. He suspected CEO Aaron Kaplan of lying under oath during congressional hearings and violating securities laws.
Recall that TRM Labs analysts estimated Tron's share of the total volume of illegal transactions in cryptocurrencies at 45%. Most of it is accounted for by Tether's USDT.
In January 2024, experts from the United Nations Office on Drugs and Crime noted the growing popularity of USDT as a money laundering tool.
The answers for the organization were published by both the Tron team led by San and the issuer of the Tether coin.
https://forklog.com/cryptorium/chto-takoe-tron