SEC says jurisdiction over Justin Sun justified by Tron founder’s 380 days in US

SEC says jurisdiction over Justin Sun justified by Tron founder’s 380 days in US
Tron Foundation founder Justin Sun. Credit: Andrés Tapia
  • Justin Sun spent time in the US while promoting tokens, SEC says in new court documents.
  • The regulator has filed more information in its lawsuit against Sun.
  • This after Sun’s team argued that the SEC was overstepping its authority in suing the Tron founder.

Tron founder Justin Sun spent a large chunk of time in the United States during a crucial period for the tokens he was marketing to investors.

That’s what the SEC alleges in new documents filed in a Manhattan court on Thursday.

The documents are part of the SEC’s lawsuit against Sun and companies the regulator says “he owns and controls.” They add new information to the SEC’s allegations initially made in March 2023.

The SEC is seeking to counter Sun’s arguments that the regulator has no jurisdiction over him or his companies, and his requests to the court to throw out the lawsuit.

The SEC now says it does indeed have “personal jurisdiction” over the case, given Sun’s extensive time in the United States.

Specifically, the commission says Sun spent 380 days in the US from 2017 to 2019 — mainly in New York, Boston, and San Francisco.

“In the course of his work on behalf of the Tron Foundation, the BitTorrent Foundation, and/or Rainberry, Sun travelled extensively to the United States during the time that TRX and BTT were promoted, offered, and sold,” reads the amended complaint.

He spent so much time in the country that in 2019, his company Rainberry — formerly called BitTorrent — rented him an apartment where he stayed during some of his business trips, the SEC alleged.

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Filing suit

The SEC first filed suit against Sun and his associated companies in March 2023.

The regulator alleged that, from around August 2017, Sun used his “alter egos” — companies he allegedly owns and controls — to orchestrate the offer and sale of unregistered security tokens, TRX and BTT.

Via these companies — Tron Foundation, BitTorrent Foundation, and Rainberry — Sun allegedly:

  • Illegally shilled the tokens, marketing them to Americans, including via celebrity endorsements, airdrops, and public appearances;
  • Worked to create a secondary market for these tokens on the exchange Bittrex; and
  • Manipulated hundreds of thousands of trades on Bittrex to make it appear to investors that there was more interest in TRX than there really was.

As part of its marketing to Americans, the SEC alleges that Sun and his companies made no efforts to exclude US investors from airdrops, livestreams on YouTube, and a contest where users were encouraged to “tell a story about Tron using emojis.”

In some cases, Sun and his companies even targeted US investors specifically, the complaint alleges, all while working with crypto exchanges to make the token widely available in the country.

Also named in the suit were US pop singer Austin Mahone and rapper and producer DeAndre Cortez Way — also known as Soulja Boy.

In separate orders, the SEC also named eight other celebrities, including actress Lindsay Lohan, YouTuber Jake Paul, and rapper Akon.

The SEC alleged that Sun’s companies paid these stars to promote his tokens on their social media accounts, without disclosing that they were being paid.

The SEC has since settled with Lohan, Akon and some of the other celebrities.

Motion to dismiss

In March 2024, Sun and the companies fought back, telling the court to throw out the suit.

Their lawyers argued that the SEC had no authority in this case, as it had provided no proof that the defendants had marketed tokens to American investors or manipulated markets Americans were involved in.

“The SEC is not a worldwide regulator,” the defendants’ lawyers said in a court document.

The lawyers called the lawsuit “yet another salvo in the SEC’s ever-widening campaign seeking dominion over digital assets whenever created, in whatever form, for whatever purpose, and wherever they may be found.”

The commission has launched a slew of lawsuits against well-known crypto exchanges, including Coinbase, Binance, and Kraken.

In Sun’s case, the regulator “levels a series of hyperbolic ‘securities’ claims against two foreign entities and a foreign national,” the lawyers said.

Sun is Chinese, and the SEC said he lives in either Singapore or Hong Kong.

“Its efforts to leverage highly attenuated contacts to the United States, to extend US securities laws to cover predominantly foreign conduct, go too far and should be rejected,” the court filings said.

Offerings of the tokens were conducted entirely overseas, Sun’s competitions and airdrops did not target US users, and no wash trading took place in the US, even if Bittrex is a US-based company, the filing said.

Tron did not immediately respond to a request for comment.

Who is Justin Sun?

Sun has made a name for himself spinning up a suite of different projects, most notably the Tron network.

The Tron Foundation raised $70 million in 2017 via an initial coin offering of its TRX token. A year later, the foundation acquired BitTorrent, now known as Rainberry, for a reported $126 million.

The file-sharing service later launched the token BTT.

Besides splashy fundraisers and acquisitions, Sun has also courted celebrities.

In 2019, for instance, he paid $4.6 million as part of a charity auction to have lunch with the billionaire investor and so-called Oracle of Omaha, Warren Buffet.

Liam Kelly reports on decentralised finance for DL News, while Joanna Wright is DL News’ regulatory correspondent. Reach out to them at or