- A Federal judge has denied the SEC’s bid to expedite Tron’s securities case.
- Tron’s defense challenged the SEC’s understanding of Howey Test elements.
In the midst of the legal clash between the Tron Foundation and the U.S. Securities and Exchange Commission (SEC), a notable development has emerged.
Recent reports reveal that Tron Foundation and its founder, Justin Sun, have secured a significant legal win.
Tron’s win over the SEC?
A Federal judge in New York has denied the SEC’s request to expedite the ongoing securities fraud case against Tron [TRX], marking a key moment in this high-stakes legal battle.
Despite this victory, speculation abounds that the legal battle is far from over. Reiterating the same, X (formerly Twitter) user Collin Brown, highlighted this uncertainty and said,
“This legal victory strengthens TRON’s defense but the battle is far from over. The decision could have major implications for how U.S. securities laws apply to global crypto transactions.”
SEC’s move against Tron
For context, the SEC sought a pre-trial conference to introduce additional arguments in its lawsuit against Tron and Justin Sun.
They claimed the defense improperly introduced new points about the “common enterprise” element of the Howey Test, after the defense’s motion to dismiss, which they argued violated legal norms.
For those unfamiliar, the Howey Test determines whether a transaction qualifies as an investment contract under U.S. securities law.
In defense, Justin Sun and the Counsels for Tron argued that the SEC misunderstood their stance on the Howey Test.
They argued their defense is based on profit expectations from others’ efforts, not the “common enterprise” element.
As a result, the judge rejected the SEC’s request, ruling that the defense had not actually challenged the “common enterprise” element.
Echoes of the past
This incident echoes a similar situation from the 20th of June.
Notably, Judge Phyllis Hamilton of the U.S. District Court for the Northern District of California dismissed four allegations from SEC that accused Ripple [XRP] of failing to register XRP as a security.
Judge Hamilton also ruled that XRP could potentially be classified as a security when sold to retail investors, allowing the lawsuit to move forward based on statements made by Ripple’s CEO, Brad Garlinghouse.
That being said, these cases underscore the SEC’s potential overreach and raise concerns about its procedural conduct.
Hence, as the Tron Foundation and the SEC continue their high-stakes legal battle, it remains to be seen, how U.S. securities laws will have an impact on the broader crypto market.
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