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The U.S. Securities and Exchange Commission (<a href="https://crypto.news/tag/sec/" data-type="link" data-id="https://crypto.news/tag/sec/">SEC</a>) has requested a judge, rather than a jury, to determine whether specific cryptocurrencies involved in the Terraform Labs case are classified as securities. 
In a Dec. 4 filing, the SEC requested the presiding judge to determine whether certain crypto assets are securities, a role traditionally reserved for a jury. 
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 <img decoding="async" src="https://s3.cointelegraph.com/uploads/2023-12/3e559550-f9a3-471c-aa35-c83421ac4c05.png" alt="SEC seeks judicial ruling on crypto asset classification in Terraform Labs case - 16">
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 SEC filing on Terraform | Source: sec.gov
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The central part of the SEC’s argument rests on applying the <a href="https://crypto.news/learn/what-is-the-howey-test-impact-initial-coin-offerings-icos/" data-type="link" data-id="https://crypto.news/learn/what-is-the-howey-test-impact-initial-coin-offerings-icos/">Howey test</a>, a longstanding benchmark for defining a security. The commission is firm in its belief that the cryptocurrencies involved in this case meet the criteria of an investment of money in a common enterprise, with profits expected predominantly from the efforts of others. 
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The SEC’s filing stated, “There is no genuine dispute of material fact that Defendants’ crypto asset offerings involved an investment of money, in a common enterprise, with an expectation of profit to be derived from Defendants’ efforts.” This statement underscores their confidence in the straightforwardness of the case, suggesting no need for a jury’s deliberation. 
This intervention by the SEC is part of a larger pattern of the commission actively categorizing cryptocurrencies as securities, as evidenced in its actions against industry giants like <a href="https://crypto.news/secs-gensler-expresses-concern-over-binance-and-coinbase/" data-type="link" data-id="https://crypto.news/secs-gensler-expresses-concern-over-binance-and-coinbase/">Binance and Coinbase</a>. In the notable case against Ripple, a federal judge’s decision on the XRP token <a href="https://crypto.news/xrp-is-not-a-security-us-judge-rules/" data-type="link" data-id="https://crypto.news/xrp-is-not-a-security-us-judge-rules/">indicated</a> that it might not be classified as a security, potentially influencing the SEC’s future dealings with Ripple’s top executives. 
 Read more: <a href="https://crypto.news/terraform-labs-highlights-secs-potential-sanction-in-do-kwons-case/"> Terraform Labs highlights SEC’s potential sanction in Do Kwon’s case </a>

SEC seeks judicial ruling on crypto asset classification in Terraform Labs case

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