US Judge Rejects SEC’s Attempt to Hamper Justin Sun’s Defense
Ruholamin Haqshanas is a contributing crypto writer for CryptoNews. He is a crypto and finance journalist with over four years of experience. Ruholamin has been featured in several high-profile crypto...
A New York District Judge has denied a motion by the U.S. Securities and Exchange Commission (SEC) aimed at weakening Tron founder Justin Sun’s defense.
The ruling, delivered on August 19 by United States District Court Judge Edgardo Ramos, represents a setback for the SEC as it continues its case against Sun.
The case, which began in March 2023, alleges that Sun and the Tron Foundation engaged in the unregistered offer and sale of securities, manipulative trading, and illegal promotion of crypto assets, specifically Tron (TRX) and BitTorrent (BTT) tokens.
In response, Sun and his legal team moved to dismiss the lawsuit in April, arguing that the SEC lacks jurisdiction over foreign digital asset transactions conducted on global platforms.
Central to the defense’s argument is the assertion that the SEC is overreaching by attempting to apply U.S. securities laws to predominantly foreign conduct.
Sun’s defense has highlighted that the tokens in question were sold outside the United States, with efforts made to exclude the U.S. market.
The SEC, however, countered with a claim that Sun’s defense introduced a new argument related to the “common enterprise” prong of the Howey test, which determines whether an asset qualifies as a security.
On August 12, the SEC requested that the court either disregard this argument in Sun’s motion to dismiss or allow them to file additional responses.
However, Judge Ramos ruled in favor of the defense, stating that no new argument had been introduced and denying the SEC’s request.
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