SEC Counters Motion to Dismiss with Summary Judgment
Last week, Terraform Labs and its former CEO Do Hyeong Kwon faced a lawsuit from the U.S. Securities and Exchange Commission (SEC). In response to the defendants’ motion to dismiss, the SEC has now filed a motion for summary judgment, claiming to have undeniable evidence of wrongdoing.
Allegations of Fraudulent Scheme
The SEC alleges that Terraform and Kwon orchestrated a fraudulent scheme that resulted in $45 billion in market losses, particularly affecting U.S. investors. The commission asserts that the defendants fabricated transactions on the Terra blockchain and deceived investors about the stability of their stablecoin.
SEC Believes Case is Strong
The SEC firmly believes that Kwon is accountable for Terraform’s violations. According to their filing, no rational jury could conclude otherwise. This motion for summary judgment follows the recent guilty verdict against former FTX CEO Sam Bankman-Fried in a fraud trial.
Defense Argues Lack of Progress in Investigation
In their defense, Terraform Labs and Kwon’s lawyers claim that despite a two-year investigation, the SEC has failed to demonstrate any misconduct by their clients. The defense argues that the evidence presented by the SEC has remained unchanged throughout the probe.
SEC Accuses Terraform Labs and Kwon of Unregistered Securities
The SEC maintains that Terraform Labs and Kwon sold unregistered securities and engaged in fraudulent blockchain transactions. The prosecutors allege that the defendants profited from these actions by converting cryptocurrency into fiat currency.
Hot Take: SEC Remains Determined in Terra Case
The SEC is intensifying its case against Terraform Labs and Do Kwon by filing a motion for summary judgment. The commission claims to possess compelling evidence of a fraudulent scheme orchestrated by the defendants, resulting in significant market losses. Despite the defense’s argument of a lack of progress in the investigation, the SEC remains steadfast in holding Terraform Labs and Kwon accountable for alleged violations. As this legal battle continues, it highlights the regulatory scrutiny surrounding the crypto industry and emphasizes the need for transparency and compliance.
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