SEC seeks summary judgment in Do Kwon and Terraform Labs case
- The SEC seeks summary judgment in Do Kwon and alleges that he misled crypto investors by creating and marketing Terra and its in-house Terra (LUNA) tokens as securities.
- The SEC has filed a motion for summary judgment in Do Kwon and Terraform Labs, arguing that the evidence is clear that they violated securities laws.
- Kwon and Terraform Labs deny the SEC’s allegations and claim that Terra Classic (LUNC), TerraClassicUSD (USTC), Mirror Protocol (MIR), and its mirrored assets (mAssets) are not securities.
By developing and promoting Terra and its internal Terra (LUNA) tokens as securities, Kwon was complicit in deceiving cryptocurrency investors, according to the “evidence” of violations supplied by the SEC.
The SEC has challenged the jury’s verdict on Terraform Labs’ alleged infractions, calling for a summary judgment in Do Kwon all the claims. In a court filing dated October 27, the SEC expressed its reservations about the jury’s leniency toward Do Kwon and his purported involvement in enabling fraudulent activities that ultimately led to the Terra ecosystem’s downfall.
The filing in the U.S. District Court for the Southern District of New York read: “No rational jury could conclude that Kwon was not liable for Terraform’s violations of Exchange Act Section 10(b) and Rule 10b-5 thereunder pursuant to Exchange Act Section 20(a).”
SEC and Kwon Clash Over Securities Claims in Ongoing Lawsuit
The SEC seeks summary judgment in Do Kwon and alleges that Kwon played a part in deceiving cryptocurrency investors by presenting Terra and its in-house Terra (LUNA) tokens as securities. Simultaneously, Kwon and Terraform Labs urged the judge to dismiss the SEC’s lawsuit, contending that Terra Classic (LUNC), TerraClassicUSD (USTC), Mirror Protocol (MIR), and its mirrored assets (mAssets) are not securities, contrary to the SEC’s claims.
However, the SEC stands by its assertion that Kwon and Terraform Labs were involved in offering and selling securities, conducting unregistered transactions for LUNA and MIR, engaging in transactions related to mAssets, and committing fraud. Terra co-founder Daniel Shin’s legal representative attributed the Terra ecosystem’s collapse to the “unreasonable operation of the Anchor Protocol and external attacks carried out by Do-hyung Kwon.” In contrast, the company recently held Citadel Securities responsible for an alleged “concerted, intentional effort” to trigger the depegging of its TerraUSD (UST) stablecoin in 2022.
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