Tron Asks New York Judge to Dismiss 2017 ICO Lawsuit
The Tron Foundation has filed a motion to dismiss a lawsuit by plaintiffs alleging that their $70 million 2017 ICO violated securities laws.
The Tron Foundation has asked a federal judge in New York to dismiss a class action lawsuit alleging securities violations through the initial 2017 Tron coin offering, describing the claims as „fatally flawed.
Chinese developer Blockchain filed a motion to dismiss on December 15, claiming the case is „unconnected“ to New York. The foundation also emphasized that the lead plaintiffs did not participate in the Tron ICO, and that they filed the lawsuit approximately two years after the end of the offer:
„Despite not having purchased during the initial offer or from Tron, the plaintiffs are attempting to form a link between their purchases and Tron’s alleged marketing activities.“
Tron argued that the lawsuit does not allege that US investors participated in the ICO.
The motion also notes that the three lead plaintiffs purchased their TRX tokens through a secondary exchange, Binance, stating that the lawsuit should be dismissed because it appeals to securities laws that do not apply to secondary market purchases.
Tron argued that the plaintiffs‘ decision to buy Bitcoin Rush years after the ICO through a secondary exchange has no connection to the Tron Foundation.
Defendants also dismissed claims that the Tron 2017 white paper was misleading by characterizing TRX tokens as not comprising securities, stating
„This assertion was not even alleged in the original lawsuit, and is nothing more than subsequent litigation.“
The lawsuit was filed on April 3, the same day that 10 other lawsuits were filed in the Southern District of New York against exchanges and crypto-currency issuers, all alleging the distribution of unregistered securities.
Tron conducted its ICO from August 24, 2017 to September 2, 2017, raising $70 million for its TRX tokens, which it described as the native currency of its online platform.