Coinbase Seeks Immediate Appellate Review in SEC Lawsuit, Citing Recent Legislation
TRON Foundation, Justin Sun Ask U.S. Court to Dismiss SEC Lawsuit
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The TRON Foundation asked a New York court to dismiss an SEC lawsuit against it and others.
The March 2023 case pertains to allegations of selling and airdropping unregistered securities, fraud and market manipulation.
The TRON Foundation and Tron founder Justin Sun asked a New York court to dismiss a lawsuit from the U.S. Securities and Exchange Commission (SEC), saying the regulator failed to establish that the court has jurisdiction over the foreign defendants, a March 28 filing shows.
“The SEC is not a worldwide regulator,” the memo to the District Court of the Southern District of New York said. “Its efforts to leverage highly attenuated contacts to the United States, to extend U.S. securities laws to cover predominantly foreign conduct, go too far and should be rejected.”
The case pertains to allegations of selling and airdropping unregistered securities, fraud and market manipulation that the SEC brought in March 2023. At the time, SEC Chair Gary Gensler said “Sun and his companies not only targeted U.S. investors … but they also coordinated wash trading on an unregistered trading platform … “
The defendants – Sun, Tron Foundation, BitTorrent Foundation and Rainberry – argued that “even if it could be shown that the exercise of personal jurisdiction over the foreign defendants is appropriate here, the claims still fail for myriad, equally powerful reasons.”
California-registered Rainberry did not contest the court’s jurisdiction, instead asking for dismissal for other reasons, including that the defendants did not receive fair notice.
“There was no fair notice that the SEC would attempt to pursue claims like those alleged here – reaching global contests and giveaways, free airdrops, and secondary trading in tokens (issued overseas, years earlier) on a developing blockchain, with few specific ties to the United States,” the filing said.
Another reason cited is that the action was premature under the major questions doctrine – a legal precedent that is meant to curb government overreach, implying that Congress writes the rules that agencies like the SEC are meant to follow.
” … the SEC’s unprecedented, novel expansion of its regulatory power to the global digital asset market is also a ‘transformative expansion’ of its regulatory authority in the absence of ‘clear congressional authorization,’ presenting a novel issue under the major questions doctrine and warranting dismissal,” the filing said.
