SEC Challenges Jury’s Conclusion on Terraform Labs’ Violations
The United States Securities and Exchange Commission (SEC) has disputed the jury’s verdict regarding Terraform Labs’ alleged violations and is seeking a summary judgment on all the claims. The SEC expressed its disagreement with the jury’s leniency towards Do Kwon, who was involved in facilitating the frauds that led to the collapse of the Terra ecosystem.
Evidence of Violations
The SEC presented evidence indicating Kwon’s role in misleading crypto investors by promoting Terra and its in-house tokens, Terra (LUNA), as securities. The commission argues that Kwon and Terraform Labs offered and sold securities, engaged in unregistered transactions involving LUNA and MIR, and committed fraud.
Terraform Labs Challenges Lawsuit
Kwon and Terraform Labs have requested the judge to dismiss the SEC’s lawsuit. They argue that Terra Classic (LUNC), TerraClassicUSD (USTC), Mirror Protocol (MIR), and its mirrored assets (mAssets) are not securities as claimed by the SEC.
Blaming External Factors
Terra co-founder Daniel Shin’s lawyer attributed the collapse of the Terra ecosystem to external attacks carried out by Do-hyung Kwon and the unreasonable operation of the Anchor Protocol. However, Terra recently accused market maker Citadel Securities of intentionally causing the depeg of its stablecoin, TerraUSD (UST), in 2022.
Hot Take: SEC Seeks Judgment Amidst Dispute
The SEC has challenged the jury’s decision regarding Terraform Labs’ violations, insisting that Do Kwon should be held liable for his involvement. The commission accuses Kwon and Terraform Labs of misleading investors by treating their tokens as securities. Meanwhile, Kwon and Terraform Labs argue that the tokens in question are not securities. This dispute raises questions about the regulatory status of cryptocurrencies and highlights the need for clarity in defining what constitutes a security in the crypto space.
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