The US Securities and Exchange Commission (SEC) amended the complaint in its case against Justin Sun and other defendants on April 18. The SEC claims that Justin Sun’s visits to the US justify its authority to take legal action.
The SEC alleges Sun orchestrated an unregistered offering and sale of crypto assets, manipulated the market for one token (TRX), and paid celebrities to illegally promote both TRX and another token (BTT) without disclosing the payments.
The SEC reports that from 2017 to 2019, Justin Sun frequently visited the US to promote and sell BTT and TRX tokens for the Tron and BitTorrent Foundations without proper registration., both of which were named as defendants.
The regulator alleges that Sun spent over 380 days in the US during this period, making business trips to major cities like New York City, Boston, and San Francisco. The SEC argues that these trips, along with Sun’s actions directed toward the US, establish “personal jurisdiction” over him and the companies he controls.
The amended complaint also alleges that Sun personally communicated with and provided documents to the US-based crypto exchange Bittrex around 2018 to have the TRX crypto listed. The SEC claims this further supports its jurisdiction over Sun and the other defendants.
According to the SEC, Sun also engaged in a manipulative trading practice known as “wash trading” to artificially inflate the trading volume of TRX. This scheme allegedly involved Sun’s employees buying and selling TRX between accounts they controlled, creating the illusion of active trading and potentially misleading investors.
These latest allegations address Sun’s request to dismiss the SEC case in March due to a lack of personal jurisdiction. Sun’s defense lawyers had argued that as a foreign national, he was not “at home” in the US and advanced similar arguments for the companies involved.
The SEC filed a lawsuit against Sun and other defendants in March 2023, asserting jurisdiction based on the defendants targeting investors in New York’s Southern District and using celebrity promoters on U.S. social media.
Also Read: NCLA Sues SEC Over Consolidated Audit Trail Rules.
