Terraform Labs Challenges SEC Conduct in Ongoing Legal Battle
Terraform Labs has taken a significant step against the Securities and Exchange Commission (SEC) in their ongoing legal dispute. The crypto firm’s lawyers have raised concerns about the Commission’s behavior and have cited a recent case to support their argument for a favorable judgment.
Terraform Labs Refers to Another Case as Supporting Evidence
In a court filing dated December 4, Terraform Labs referenced the SEC’s case against Digital Licensing as supplementary evidence to bolster their motion for summary judgment. They highlighted how Chief Judge Robert Shelby had issued a decision and order to show cause against the Commission in that case.
The court in the Digital Licensing case found that the SEC had made serious misrepresentations and ordered them to explain why they should not be sanctioned. Terraform Labs’ lawyers argued that this decision was relevant to their case, particularly regarding the SEC’s use of evidence excerpts and specific allegations.
Terraform Labs Aims for Summary Judgment in Their Favor
The defendants are hoping that the ruling from the Digital Licensing case will influence Judge Rakoff, who presides over their case, to rule in their favor. They specifically mentioned their motion for summary judgment filed on October 27, asserting that the SEC lacks a strong legal basis for its claims.
Previously, Judge Rakoff ruled that the UST and LUNA coins could be considered securities, giving the SEC a significant victory. It remains uncertain whether he will side with Terraform Labs this time around.
SEC’s Pattern of Missteps
This is not the first time the SEC has faced challenges regarding its crypto enforcement actions. The high-profile case against Ripple has been particularly problematic for the Commission. After years of claiming XRP was a security, Judge Analisa Torres ruled that it was not.
This ongoing pattern suggests that the SEC may prioritize its beliefs over legal interpretations. Ripple’s Chief Legal Officer, Stuart Alderoty, recently criticized this “troubling pattern” and highlighted the court’s findings of hypocrisy in the SEC’s actions. The SEC has also been deemed “arbitrary and capricious” in its handling of Grayscale’s application and made misrepresentations in the Digital Licensing case.
Hot Take: Terraform Labs Challenges SEC Conduct and Cites Relevant Case
Terraform Labs has taken a significant step in its legal battle against the SEC by questioning the Commission’s behavior. By referencing the SEC’s case against Digital Licensing, Terraform Labs’ lawyers aim to support their motion for summary judgment. They argue that the court’s ruling in that case is relevant to their arguments about the SEC’s use of evidence excerpts and specific allegations. This move showcases a growing trend of challenges against the SEC’s crypto enforcement actions, highlighting concerns about potential biases and misrepresentations by the Commission.
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