US SEC Requests Ruling on Unregistered Securities
The US Securities and Exchange Commission (SEC) has asked the judge overseeing the case against Terraform Labs to determine whether the company offered and sold unregistered securities. The SEC argues that the question of securities status should be decided by the court, not a jury.
SEC Wants to Exclude Jury From Deciding on Securities
In the case against Terraform Labs and its former CEO, Do Kwon, the SEC has requested that a jury be prevented from determining whether the assets in question qualify as securities.
In a filing to the US District Court for the Southern District of New York, the SEC argues that the question of whether specific crypto assets are securities is a legal matter for the court, not a factual question for a jury.
SEC: No Factual Disputes in Terraform Case
The SEC states that there are no factual disputes regarding how Terraform’s crypto assets were sold, the terms of the offers and sales, or the marketing materials surrounding them. The agency believes that the undisputed facts raised in previous filings are sufficient for the court to rule on whether the assets qualify as securities.
Judge Rakoff Could Grant Summary Judgment
The SEC suggests that Judge Jed Rakoff could grant a summary judgment in the Terraform case, as it is a straightforward matter without factual disputes. The agency points out that summary judgments are routinely granted in similar circumstances.
In the SEC v Ripple case, Judge Analisa Torres granted a summary judgment, ruling that Ripple’s XRP sales did not qualify as securities. Terraform attempted to use this ruling as a basis for dismissing the case against them, but Judge Rakoff disagreed, stating that the Ripple and Terraform cases are distinct from each other.
Hot Take: SEC Seeks Judicial Determination of Securities Status
The SEC is seeking a ruling from the court on whether the crypto assets offered and sold by Terraform Labs qualify as unregistered securities. They argue that this determination should be made by the judge, not a jury. The agency believes there are no factual disputes in the case and that Judge Rakoff has the authority to grant a summary judgment. This case highlights the ongoing debate over the classification of cryptocurrencies as securities and the role of the courts in making that determination.
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