The company claims that there was no US involvement and that the sales of BitTorrent (BTT) and Tron (TRX) tokens were carried out “entirely overseas.”
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The US Securities and Exchange Commission (SEC) is facing legal action, and the TRON Foundation, a nonprofit that manages and oversees the TRON network, has filed a move to dismiss the case on the grounds that the SEC has overreached its jurisdiction globally.
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The motion, filed on March 28 with a federal court in New York, claims that the SEC’s attempt to apply US securities laws to activities that are primarily conducted abroad is unwarranted and over the top.
“The SEC is not a worldwide regulator. 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,” wrote the TRON Foundation.
The SEC recently claimed that the sales of BitTorrent (BTT) and TRON (TRX) tokens were unregistered securities offerings, to which the motion is a response. TRON was also charged by the SEC with manipulating trading procedures and paying celebrities in secret to promote their tokens.
The TRON Foundation disputes the accusations and explains that, initially, restrictions were put in place to prevent US residents from taking part in the token sales, which were aimed at foreign users on a worldwide platform. The foundation also calls into question the SEC’s jurisdictional claims, which are based on airdrops and contests on international social media platforms, as well as secondary sales on US-based platforms.
“Undeterred, the SEC seeks to hale the foreign defendants to this Court nonetheless, asserting that later secondary sales on a U.S.-based platform serving users worldwide, and global social media contests, and airdrops of those same digital assets, somehow were “unregistered U.S. securities offerings,” even though the connection to the U.S. forum in each instance is tenuous at best,” stated the TRON Foundation.
The foundation’s justification also emphasizes the fact that neither the BitTorrent Foundation nor the TRON Foundation has any staff members or offices in the US; instead, they are Singapore-based organizations. According to TRON, these organizations are not related to a US legal action.
The TRON Foundation argues that the SEC’s extraterritorial application of US laws to foreign transactions is illegal and lacks a legal basis, citing “the Supreme Court case Morrison v. National Australia Bank Ltd.”
In an attempt to restrict the SEC’s jurisdiction to US borders, the foundation has requested that the court dismiss the SEC’s lawsuit on the grounds of erroneous jurisdictional claims and imprecise accusations.
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