SEC amends case against Justin Sun to establish jurisdiction

The SEC alleges that Justin Sun spent nearly 400 days in the US from 2017 to 2019

article-image

SEC Chair Gary Gensler | Muhammad Alimaki/Shutterstock modified by Blockworks

share

The Securities and Exchange Commission amended its complaint against Justin Sun on Thursday evening.

The complaint, filed initially in March 2023, alleges that the founder of Tron’s network sold unregistered securities. 

In the amended complaint, the SEC alleges that Sun traveled “extensively” to the US on behalf of Tron, BitTorrent and Rainberry.

“Specifically, Sun spent more than 80 days in the United States in 2017, more than 120 days in the United States in 2018, and approximately 180 days in the United States in 2019. During Sun’s business trips to the United States in 2019, he spent time in various cities, including New York City, Boston, Massachusetts, and San Francisco,” the SEC added to its complaint on Thursday.

As part of the regulator’s approach to establish jurisdiction, the Commission added that Sun — who is not a US citizen — broadcasted a livestream from the San Francisco office which allegedly promoted the Tron ecosystem.

Read more: SEC sues Tron network founder for allegedly selling securities

“During the livestream, Sun explained that BTT would benefit TRX holders because ‘the current Tron community’ would be allocated with BTT, meaning that TRX holders would be ‘entitled’ to receive ‘the BTT airdrop.’ Sun stated that, because of the relationship between TRX and BTT, ‘the TRX community [was] tied with the BTT community,’” the complaint claims.

The SEC’s amended filing pushes back against Sun’s lawyers, who previously tried to claim — in a motion to dismiss filed earlier this year — that the SEC’s claims were “out of the SEC’s regulatory reach.” The Commission, the motion added, failed to establish “personal jurisdiction over each foreign defendant for each claim.”

“This case originates with foreign digital asset offerings to foreign purchasers on global platforms,” the lawyers wrote.

Read more: Circle cites compliance as it discontinues USDC on Tron

The SEC’s initial complaint alleged that Sun distributed billions of both TTX and BTT tokens to the public, and created secondary markets to trade the assets. In an argument similar to what we’ve seen from the SEC in other cases that they’ve brought against crypto firms, the Commission said Sun needed to register the sales but failed to.

Alongside the press release at the time, the SEC accused Sun of “fraudulently manipulating the secondary market for TRX through extensive wash trading.”

The SEC, outside of its focus on Sun, settled with eight celebrities last year, including Lindsey Lohan, for promoting the tokens.


Start your day with top crypto insights from David Canellis and Katherine Ross. Subscribe to the Empire newsletter.

Explore the growing intersection between crypto, macroeconomics, policy and finance with Ben Strack, Casey Wagner and Felix Jauvin. Subscribe to the Forward Guidance newsletter.

Get alpha directly in your inbox with the 0xResearch newsletter — market highlights, charts, degen trade ideas, governance updates, and more.

The Lightspeed newsletter is all things Solana, in your inbox, every day. Subscribe to daily Solana news from Jack Kubinec and Jeff Albus.

Tags

Upcoming Events

Javits Center North | 445 11th Ave

Tues - Thurs, March 18 - 20, 2025

Blockworks’ Digital Asset Summit (DAS) will feature conversations between the builders, allocators, and legislators who will shape the trajectory of the digital asset ecosystem in the US and abroad.

Brooklyn, NY

TUES - THURS, JUNE 24 - 26, 2025

Permissionless IV serves as the definitive gathering for crypto’s technical founders, developers, and builders to come together and create the future.If you’re ready to shape the future of crypto, Permissionless IV is where it happens.

recent research

Unlocked Advisory-min.png

Research

This report distills Blockworks Advisory’s research on incentive programs and their analysis, offering a foundation for designing future initiatives and advancing industry-wide standards. By highlighting key lessons and methodologies, we aim to empower protocols to make informed, data-driven decisions.

article-image

Will investors take a 10% lower return to get access to a regulated investment wrapper?

article-image

Brian Armstrong called out the hire of Gurbir Grewal, who had been the SEC’s enforcement division director since 2021

article-image

Certain senators will be interested to learn about Atkins’s private sector business interests, specifically those related to crypto

article-image

Innovative smart debt and collateral features are fueling Fluid’s rise to $1.2 billion TVL, reshaping the Instadapp brand

article-image

Crypto’s liquidity engine is now worth over $300 billion

article-image

Bitcoin Jesus is arguing that the Department of Justice’s tax fraud charges are “unconstitutional”