The Crypto Roundup: 01 April 2024 | CryptoCompare.com

The Crypto Roundup: 01 April 2024 | CryptoCompare.com

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On March 28, Tron Foundation urged a New York federal court to drop a lawsuit initiated by the U.S. SEC, arguing that the SEC is overreaching by targeting actions that primarily occurred outside the U.S. The foundation’s dismissal motion highlights its stance against the SEC’s global jurisdiction claims over its digital asset offerings.

The SEC’s legal action against Tron, initiated last March, centers on allegations that the sale of Tron (TRX) and BitTorrent (BTT) tokens constituted unregistered securities offerings. The lawsuit also involves the BitTorrent Foundation and Rainberry Inc., both associated with Tron since their acquisition in 2018. However, Tron, headquartered in Singapore, contends that its token sales were conducted overseas, explicitly avoiding the U.S. market, thereby falling outside the SEC’s regulatory scope.

Tron’s defense further argues that the secondary sales of tokens on a U.S.-based platform do not warrant classification as unregistered U.S. securities, challenging the SEC’s application of the Howey test for defining investment contracts. Additionally, the foundation refutes claims of manipulative market practices, such as “wash trading” by Tron’s founder, Justin Sun, and the undisclosed promotion of tokens by celebrities, asserting a lack of specific facts or identifiable victims in the SEC’s allegations.

The motion also criticizes the SEC for its general and unspecified claims against the defendants, including an absence of concrete allegations of fraud. Tron advocates for dismissal based on the major questions doctrine, which emphasizes the need for explicit congressional authorization for regulatory actions, a principle other crypto entities have also invoked in similar legal disputes.

The SEC is expected to respond to Tron’s dismissal motion within the next two weeks.

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