BREAKING: Do Kwon Can Avoid SEC Charges Thanks To Hinman Emails
- The legal firm demonstrating Do Kwon is trying to present evidence to counter the SEC’s allegations.
- Hinman emails in the lawsuit between the SEC and Ripple are also mentioned.
- Kwon’s lawyers assert that the algorithmic stablecoin UST is not a security.
Dentons, the legal firm representing Terraform Labs and co-founder Do Kwon, has submitted new documents, including Hinman emails, in support of a motion to dismiss a complaint brought by the Securities and Exchange Commission in the United States (SEC).
On June 15, attorneys for Terraform Labs and co-founder Do Kwon, as well as lawyers for the US Securities and Exchange Commission, submitted replies to the request to dismiss the complaint in the US District Court for the Southern District of New York.
Dentons previously represented Do Kwon in opposing a US SEC subpoena in its Mirror Protocol inquiry in 2021 and a class action lawsuit in the Singapore High Court in 2022. Terra is also represented by the legal firm in other litigation. Dentons, the world’s biggest legal company, was engaged by Terraform Labs and Do Kwon to assist with prosecution and investigation by US federal prosecutors.
The court hearing on Thursday focused on whether Terraform Labs’ digital assets qualify as securities under an investment contract.
Dentons lawyers, who represent Terraform Labs and co-founder Do Kwon, argue that the algorithmic stablecoin UST (now USTC) is not a security since it was created for practical reasons rather than as an investment contract.
They submitted new records in support of their motion to dismiss a lawsuit. It contains the hearing on digital asset regulation and stablecoin issuance held by the US House Financial Services Committee, the SEC’s request for a restraining order against Binance.US, and Hinman emails in the SEC v. Ripple litigation.
While the US Congress debates legal frameworks for digital assets and stablecoin production, lawyers notice a regulatory vacuum in determining whether crypto assets are securities. Moreover, the SEC is working beyond the bounds of securities rules, as shown by internal SEC communications on investment contracts in search of security.
The extra papers supplied by the defendants, according to US SEC attorneys, do not support the move to dismiss the complaint. Moreover, Binance. This lawsuit is unrelated to the US transcript or internal SEC communications. They argue that the Howey Test clearly defines what constitutes an investment contract, and therefore UST was a security.
A Montenegrin court ordered that former crypto fugitive Do Kwon and his colleague Han Chang-Joon be detained for another six months as judges evaluate an extradition request from South Korean prosecutors as well as one from US authorities for Kwon alone.
The ruling comes after a higher court in Podgorica determined that Kwon and Han would be freed on bail of €400,000 ($436,000) apiece.
The conflicting legal proceedings highlight Kwon’s perplexing situation since he has been accused by South Korean and US authorities of defrauding investors in connection with the $60 billion collapse of the Terra blockchain ecosystem in May 2022.
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