Mirror

In its ongoing lawsuit against Coinbase, the SEC has cited a favorable judgment from the Southern District of New York <a href="https://financefeeds.com/ripple-objects-to-secs-use-of-terra-ruling-to-warrant-appeal/">involving Terraform Labs</a>. This ruling declared that UST, LUNA, wLUNA, and MIR tokens are securities. 
The agency is using this precedent to bolster its argument in the Coinbase case, where the focus is on a different set of tokens. These include Solana, Cardano, Polygon, Filecoin, The Sandbox, Axie Infinity, Chiliz, FLOW, Internet Computer, Near Protocol, VGX, DASH, and Nexo, which the SEC claims should be classified as unregistered securities. 
“The court’s analysis of the Terraform defendants’ so-called ‘stablecoin’ UST is particularly relevant to this Court’s consideration of Defendants’ arguments concerning Binance’s so-called ‘stablecoin’ BUSD, and Defendants’ staking-as-a service, BNB Vault, and Simple Earn programs,” the filing reads. 
Separately, the SEC filed a motion in the U.S. District Court for the District of Columbia, asking the judge to consider the summary judgment ruling from the <a href="https://financefeeds.com/do-kwons-extradition-delayed-following-montenegro-court-decision/">Terraform Labs</a> case in its enforcement action against Binance, Binance.US, and former CEO Changpeng Zhao. 
In late December, a U.S. federal judge sided with the SEC in its case against Terraform Labs and its former CEO, Do Kwon, for offering and selling two unregistered securities. It concludes that certain tokens were securities due to their nature as investment contracts and that the offers and sales of UST constituted an investment contract. 
However, the SEC’s argument that the Mirror Protocol’s mAssets constituted security-based swaps was rejected by the court, ruling that mAssets do not meet the statutory definition. 
The SEC’s argument is that the Terraform Labs judgment provides additional grounds for Judge Amy Jackson to consider denying Binance's motion to dismiss. <a href="https://financefeeds.com/changpeng-zhao-leaves-binance-us-as-sec-ramps-up-scrutiny/">Binance and Zhao</a> had earlier moved to dismiss the SEC's case, arguing that the SEC had overstepped its authority and retroactively imposed its standards on securities. 
The court denied motions by both&nbsp;<a href="https://financefeeds.com/binance-us-sued-for-promoting-terrausd-as-safe-and-fiat-backed/">Terraform Labs and Kwon</a>&nbsp;to exclude testimony from two SEC experts and rejected the SEC’s motion to exclude testimony from a defense expert.

SEC leverages Terraform case against Binance and Coinbase

FinanceFeeds

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