Terraform Labs Requests Dismissal of SEC Charges in Securities Fraud Case
Terraform Labs has filed a motion requesting the dismissal of charges brought by the U.S. Securities and Exchange Commission (SEC) accusing the company of multibillion-dollar securities fraud. The filing argues that the SEC failed to demonstrate that Terraform Labs offered unregistered securities for trading. Despite two years of investigation, extensive discovery, and the exchange of millions of documents, the SEC has not provided evidence of any wrongdoing on the part of the defendants.
Rejection of Expert Opinions
Terraform Labs also urged the court to reject the opinions of the experts presented by the SEC to support its case. In particular, they criticized an analysis by a Rutgers University professor, deeming it “conceptually flawed.”
Background on SEC Lawsuit
In February 2023, Do Kwon was charged with securities fraud by the SEC, involving Terra token (LUNA) and TerraUSD stablecoin. Investors purchased these assets at significant prices, believing that all transactions occurred on the Terra blockchain. However, the SEC alleges that this was not the case.
Previous Ruling by District Judge Jed Rakoff
In July 2023, Terraform Labs’ request to dismiss the SEC’s lawsuit was denied by District Judge Jed Rakoff. The company had argued for dismissal based on a decision in a similar case against Ripple Labs. However, Judge Rakoff found the SEC’s arguments compelling and rejected Terraform Labs’ request.
Latest Accusation against Do Kwon
In October, the SEC accused Do Kwon of fraudulent transactions involving Chai. The department asserts that Do Kwon misled investors by claiming that all payments were conducted on the Terra network, which was proven to be false.
Hot Take: Terraform Labs Fights Back Against SEC Charges
Terraform Labs is not backing down in its fight against the SEC’s charges of securities fraud. The company has requested the dismissal of the case, arguing that the SEC has failed to provide evidence of any wrongdoing. Additionally, Terraform Labs is challenging the opinions of the SEC’s expert witnesses, criticizing their flawed analysis. This legal battle follows the SEC’s allegations against Do Kwon, involving Terra token and TerraUSD stablecoin transactions. While a previous request for dismissal was denied by District Judge Jed Rakoff, Terraform Labs remains determined to defend itself against the SEC’s accusations.
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