The US SEC filed an amended complaint in its case against Justin Sun and other defendants on April 18, arguing that Justin Sun’s alleged visits to the US should grant it the jurisdiction required to pursue legal action.
The regulator alleged that Sun “traveled extensively” to the US while he and several companies carried out unregistered offers and sales of BTT and TRX tokens.
According to the watchdog, Sun spent over 380 days in the US between 2017 and 2019 and made business trips to major cities, including New York City, Boston, Massachusetts, and San Francisco. He carried out the trips on behalf of the Tron Foundation and the BitTorrent Foundation — both of which are also named as defendants in the case.
The SEC wants to use these trips to claim jurisdiction over Sun and the companies to pursue regulatory and legal action in the US.
Wash trading
The SEC alleged that Sun and the companies engaged in a wash trading scheme on the now-defunct crypto exchange Bittrex.
Though the original complaint identified many of the same wash trading activities, it identified the exchange on which wash trading took place only as an unnamed “trading platform.”
The agency included the fact that Bittrex is based in the US alongside its other claims to personal jurisdiction over Sun and the other defendants.
The amended complaint also alleges that Sun personally communicated with and provided documents to Bittrex circa 2018 to have the exchange list the TRX crypto. The documents link Sun to the other companies, and Sun personally signed some documents.
Countering the request for dismissal
The latest allegations address the concerns raised by Sun in his request to dismiss the SEC case in March due to a lack of personal jurisdiction. Defense lawyers argued that Sun is a foreign national and not “at home” in the US and advanced similar arguments for the companies.
The request for dismissal also identified the supposed improper distributions on Bittrex but said that “there is no allegation that any US resident purchased or attempted to purchase TRX on this unidentified platform, or that the effort to list TRX succeeded.”
The SEC sued Sun and the other defendants in March 2023. At the time, it primarily based personal jurisdiction claims around the allegation that sales focused on investors in the Southern District of New York and the allegation that celebrity promoters contacted individuals in the US via social media.
The SEC separately sued Bittrex in April 2023 and settled the case in August 2023. The company halted operations globally in late 2023.
