Lawyer Do Kwon: SEC Accusations Of Do Kwon And Terra Fraud Are Baseless

Key Points:

• Do Kwon’s lawyer argued that the SEC’s accusations against Kwon and Terraform Labs were unfounded.
• The Terraform co-founder called on the judge to dismiss the SEC’s case.
• The SEC had previously been granted access by a judge to Terra’s documents at its Singapore headquarters despite Do Kwon’s objections.

Lawyers for the former head of crypto firm Terraform Labs Do Kwon say the US regulator’s lawsuit accusing him and Terra of securities fraud is baseless, partly because the stablecoin is being mentioned as currencies, not securities.

US law prohibits regulators from using federal securities laws to assert jurisdiction over digital assets in this case, Kwon’s attorney said Friday in a judge request to dismiss the case.

In February, the US Securities and Exchange Commission filed a lawsuit against Kwon and Terraform Labs, the business he co-founded, alleging fraud in connection with the death of the TerraUSD stablecoin. According to the agency, the corporation engaged in the illegal offering of unregistered securities and carried out a strategy to destroy at least $40 billion in market value.

The case, according to Kwon’s counsel, is an unethical attempt by the SEC to regulate cryptocurrencies using outdated rules, despite the fact that Congress, the executive branch, and the agency disagree on what constitutes securities.

“The SEC’s improper assertion of power here by trying to shoehorn all cryptocurrencies into its definition of a security fails,”

The lawyers said in their filing.

Despite objections from the defendant, the SEC was granted access to all of Terra’s records and documents by a US judge at its main branch in Singapore. It is not known what the SEC is looking for, but it is undoubtedly to the detriment of the company and its executives.

Late in March, Do Kwon was taken into custody in Montenegro. Both the US and South Korea, where he is also accused of fraud, are requesting his extradition. The extended arrest of Kwon was authorized by a judge in the Montenegrin capital of Podgorica on Friday after he was charged by local authorities with falsifying travel documents to board a flight to Dubai.

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