The SEC declared victory after Judge Rakoff refused both parties’ requests for summary judgment on the SEC’s fraud allegations. The stablecoin TerraUSD aims to keep its value at $1, and Luna, a more traditional token closely related to TerraUSD, is the focus of the legal dispute.
According to the SEC’s fraud accusations, Do Kwon and the Terraform Labs team engaged in deceptive and dishonest practices concerning the marketing and sale of these digital assets. It is said that the SECs’ and Do Kwon’s legal team’s arguments were carefully reviewed before a decision was made.
Jed Rakoff, the United States District Judge, in his most recent decision, decided that the embattled cryptocurrency mogul Do Kwon and his Terraform Labs firm went against the rules by refusing to register their two digital assets, which later led to their collapse in 2022.
Terraform Lab Reacts to Development, Vows to Continue Fighting
The regulatory concern surrounding stablecoins and their potential classification as securities is underscored by the SEC’s focus on TerraUSD and Luna. Terraform Lab has come out to express its displeasure on the recent outcome.
The company still doesn’t acknowledge the SEC’s claim that its tokens are securities. Terraform Lab has vowed to continue fighting against the SEC’s decision and its accusation of fraud against them. Analysis by SEC claims that TerraUSD suffered a major loss, accounting for $40 billion, when it failed to maintain the $1 official peg sometime in May 2022.
Cryptocurrency Community Demand For regulatory clarity, Trial Scheduled for 2024
The court’s refusal of summary judgment suggests that it considers the SEC’s assertions to be false and that a trial is necessary to ascertain the relevant facts. The trial, set for January 29, 2024, will allow both sides to present evidence and arguments so that the court can rule on the claims in the end.
In reaction to the court verdict, the cryptocurrency community says that the Stablecoin technologies need regulatory clarification regarding their classification and treatment to continue developing and being adopted.
The trial, scheduled for January 29, 2024, will give the defense and the SEC a opportunity to submit their cases, influencing the regulatory environment surrounding linked tokens and stablecoins.
While reacting to the judgment, Ashish Kumar from Todayq News says that an important development in the court case involving the SEC’s lawsuit against Do Kwon and Terraform Labs is the denial of summary judgment.
Experts Call Judgment “the Denial of Summary Judgment”
While reacting to the judgment, Ashish Kumar from Todayq News says that an important development in the court case involving the SEC’s lawsuit against Do Kwon and Terraform Labs is the denial of summary judgment.
The ruling by Judge Rakoff had stated he couldn’t find a genuine disagreement that the four participating cryptocurrency assets, including Luna and TerraUSD, qualify to be named security, considering the 1946 United States Supreme Court decision in SEC vs. WJ Howey Co, that defined an investment contract.
Judge Rakoff also acknowledged that the jurors may disagree on the issue of whether Terraform Lab (the supposed defendants) intends to scam its investors based on many statements. The cryptocurrency community is still expecting the final resolution to determine the SEC’s solution on selling the so-called unregistered securities when the defendant’s Terraform Lab liability on fraud claims has been decided.