Terraform Labs (TFL) and its co-founder Do Kwon have requested the dismissal of the charges brought against them by the U.S. Securities and Exchange Commission (SEC).
In a new court filing, Kwon pushes back against charges related to the alleged violation of securities registration and anti-fraud provisions in relation to TFL’s stablecoin, TerraUSD (UST), and its companion digital asset, LUNA.
The SEC has accused TFL of violating securities law by selling these digital assets without registering them with the agency.
Kwon and TFL are motioning to dismiss the SEC’s claims, arguing that the digital assets are not securities under the SEC’s own definitions and that the agency lacks the jurisdiction to bring charges against them. They claim that the tokens and projects were aimed at the world and did not specifically target US investors.
While a South Korean court recently dismissed securities law violation charges against the co-founder of TFL, Shin Hyun-seong, deeming LUNA a non-security under Korea’s Capital Markets Act, Kwon’s motion is only applicable to LUNA. The SEC has accused TFL of violating securities laws with respect to UST, LUNA, Wrapped LUNA (wLUNA), and the tokens on Mirror protocol: mAssets, and MIR.
Kwon’s legal issues do not end there. In a recent press conference, the Seoul Southern District Prosecutor’s office identified a Swiss bank account where Kwon allegedly transferred over 10,000 Bitcoin (BTC) from the Terra platform and the Luna Foundation Guard to a cold wallet, which he then converted to fiat.
While the prosecutors have clarified that the $100 million was not kept solely in the bank account and was dispersed in various locations, Kwon’s legal woes continue to mount. The Financial and Securities Crime Joint Investigation Unit of the Seoul Southern District Prosecutor’s office is reportedly monitoring Bitcoin owned by Luna Foundation Guard.
Don't Miss a Beat – Subscribe to get email alerts delivered directly to your inboxFeatured Image: Shutterstock/klyaksun