United

Mirror

A federal judge in the United States has ruled in favor of the Securities and Exchange Commission (SEC) concerning allegations that Terraform Labs and its former CEO, Do Kwon, offered and sold two unregistered securities. 
According to District Court Judge Jed Rakoff’s filing, the court granted summary judgment in favor of the SEC, asserting that Terraform Labs and Kwon sold LUNA, UST, and MIR as unregistered securities. However, the judge did grant summary judgment for the defendants regarding the alleged unregistered offer and sale of security-based swaps. 
While the SEC claimed that Kwon and Terraform Labs offered security-based swaps through the creation and management of the Mirror Protocol, allowing others to create “mAssets,” the court dismissed this argument. It ruled that mAssets did not meet the statutory definition of a security-based swap. These mAssets are blockchain assets mirroring real-world assets by reflecting on-chain exchange prices. 
The court referenced a previous statement from Kwon suggesting that LUNA satisfied the Howey test, indicating that investors could expect profits from Terraform and Kwon’s efforts. Similarly, regarding the MIR token, the court concluded that the defendants led MIR holders to anticipate profits based on Terraform’s endeavors with the Mirror Protocol. 
The court rejected the exclusion of testimony from two SEC experts but also denied the exclusion of testimony from defense expert Dr. Terrence Hendershott. 
Although the SEC alleged that Kwon orchestrated a fraudulent cryptocurrency scheme causing a $40 billion market value loss in 2022, both sides’ motions for summary judgment on these fraud claims were denied. The upcoming jury trial, set to begin in January, will decide the fraud claims. Jury selection is scheduled for January 24, 2024. 
The post <a rel="nofollow" href="https://www.unlock-bc.com/115077/sec-receives-favorable-ruling-in-terraform-labs-case-on-unregistered-securities/">SEC Receives Favorable Ruling in Terraform Labs Case on Unregistered Securities</a> appeared first on <a rel="nofollow" href="https://www.unlock-bc.com">UNLOCK Blockchain</a>.

SEC Receives Favorable Ruling in Terraform Labs Case on Unregistered Securities

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