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- The US SEC suffered a blow in its ongoing case against the Tron Foundation and founder Justin Sun.
- TRX now ranks as the 10th largest coin after displacing Cardano amid Sunpump hype.
The case between the US Securities and Exchange Commission (SEC), the Tron Foundation, and Justin Sun has taken a new twist in court. A New York Federal Judge has denied the SEC’s request to expedite the legal proceedings in its securities fraud lawsuit against the network.
Tron Gets Victory Against SEC
The Judge’s ruling potentially puts Tron (TRX) ahead of the regulator in the ongoing legal battle. On Monday, the SEC filed a motion requesting a pre-trial conference and additional responses in its case against Sun, the BitTorrent Foundation, and Rainberry Inc.
The SEC argued that it was improper for the defendants to introduce a fresh argument in a reply brief. They claimed the defendants introduced new legal arguments regarding the “common enterprise” element of the Howey Test.
The test determines whether an asset qualifies as an investment contract under U.S. securities laws. The SEC requests permission to strike these arguments or file a response to address the new argument.
However, Judge Edgardo Ramos, Presiding over the case, denied the SEC’s motion, ruling in favor of Tron’s legal team. The Judge concluded that the defense had not challenged the “common enterprise” aspect of the Howey Test as the SEC claimed. This ruling is a setback for the SEC, slowing its strategy to settle procedural concerns before a possible trial.
Tron’s defense focuses on several Howey Test points, especially about investing money in hopes of profiting from other people’s labor. Tron’s attorneys argued that the SEC had distorted their stance and created needless controversy. Additionally, the lawyers have resisted the SEC’s request for additional records, claiming that doing so will simply complicate the case.
Furthermore, they contend that US securities regulations shouldn’t apply because TRX and BTT tokens were predominantly sold outside the country. In response, the SEC claimed jurisdiction by pointing out that Justin Sun often visits the country for business-related issues.
Judge Ramos’s decision, however, implies that this argument was not relevant at this stage of the litigation.
Although this verdict represents a major victory for Tron, the legal dispute is still ongoing. The jurisdiction issue, which might set a precedent for how US securities regulations apply to global crypto transactions, remains unresolved.
Reaction from TRX
As the crypto community awaits the next move in the case, TRX, Tron’s native asset, continues on a bullish trajectory. MarketCap data shows the token is trading at $0.1469, demonstrating a 7% surge in the past day.
The trading volume spiked over 123% to $781 million, suggesting increased investor interest. TRX is now the 10th largest digital asset by market capitalization after displacing Cardano.
TRX’s increasing value can be attributed to the introduction of Sunpump, a meme fair launch platform on the Tron network, as previously mentioned in our report. Moreover, the platform launch has also fueled a spike in TRON DAO transactions.
According to our analysis, transaction volume in the TRON ecosystem worth $100 to $10,000 has increased by 124% following the Sunpump hype.
