The US Securities and Exchange Commission (SEC) recently filed an amended complaint in a case involving Justin Sun and several other defendants. The SEC argues that Sun’s numerous visits to the US provide the jurisdiction necessary to pursue legal action. Over the course of 2017 to 2019, Sun reportedly spent more than 380 days in the US, visiting cities such as New York City, Boston, and San Francisco. These trips were conducted on behalf of both the Tron Foundation and the BitTorrent Foundation, which are also named as defendants in the case.
The SEC is accusing Sun and the companies he represents of engaging in unregistered offers and sales of BTT and TRX tokens. One of the specific allegations is that Sun and the companies participated in a wash trading scheme on the now-defunct crypto exchange Bittrex. While the original complaint did not name the specific exchange involved, it was later revealed to be Bittrex, a US-based platform. The SEC also claims that Sun communicated with Bittrex in 2018 to have the exchange list the TRX crypto, further tying him to the alleged wrongdoing.
Sun’s defense team previously argued that he should not be subject to the jurisdiction of the US courts due to his status as a foreign national. They claimed that Sun is not “at home” in the US, attempting to dismiss the case on these grounds. Despite this, the SEC’s amended complaint seeks to establish personal jurisdiction based on Sun’s extensive presence in the US and his interactions with US-based entities like Bittrex. The defense also raised concerns about the lack of evidence that US residents were involved in the alleged improper distributions on Bittrex.
The SEC initially sued Sun and the other defendants in March 2023, primarily focusing on jurisdictional claims related to investor activities in the Southern District of New York. Additionally, the agency cited celebrity promoters who reportedly contacted individuals in the US through social media. Bittrex, the exchange at the center of the allegations, was separately sued by the SEC in April 2023 and ultimately settled the case in August 2023. Following these legal actions, Bittrex ceased operations globally at the end of 2023.
The SEC’s ongoing case against Justin Sun and other defendants highlights the complexities of jurisdictional issues in the realm of cryptocurrency trading and compliance. The agency’s efforts to establish jurisdiction based on Sun’s activities in the US underscore the global nature of regulatory enforcement in the digital asset space. As the case continues to unfold, the outcome will likely have significant implications for the regulation of crypto exchanges and the responsibilities of individuals involved in the industry.
