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The Terraform Labs vs. SEC lawsuit, launched in February, saw a vital development on 28 December. The United States Fed Judge Jed Rakoff ruled that Terra-linked tokens, including Luna and MIR, are securities.
📜 UST, LUNA, wLUNA, and MIR Deemed Securities by US Court! (#luna #lunc #TerraLabs #ust #DoKwon #mir)
— Logll (@LogllNews) December 29, 2023
âž– UST, LUNA, wLUNA, & MIR are declared securities! See the ruling here: (https://t.co/JIChNq9q3Q)
➖ A US court has ruled in favor of the SEC against Terraform Labs.… pic.twitter.com/wVP10hWEqM
The summary judgment indicated that Terraform Labs violated securities laws when it sold its digital coins to the public. Meanwhile, the latest milestone will likely shape the suit’s trajectory ahead.
Terraform’s latest ruling
The judge ruled against the crypto company, stating that Luna and MIR are securities despite being investment contracts. The declaration aligns with the United States SEC’s viewpoint. That means Terraform and the involved cryptocurrencies could be heading for possible regulatory implications.
While the latest ruling is crucial, the legal fight between Terraform and the SEC continues. The judge denied the motions for fraud charges summary judgment by both parties. The jury will keep navigating the lawsuit’s intricacies.
The judge allowed testimonies from both sides, excluding two defense witnesses prioritizing Terra’s custodial wallets. Meanwhile, the recent decision sets Luna and MIR under SEC’s radar.
Allegations against Terraform
The Securities & Exchange Commission sued Terraform Labs and its chief, Do Kwon, for a multi-billion securities fraud in February.
Breaking: SEC sues Do Kwon and Terraform Labs for fraud . "We allege that Terraform and Do Kwon failed to provide the public with full, fair, and truthful disclosure as required for a host of crypto asset securities," said SEC chair Gary Gensler.
— debbie (@xiaomai76409159) February 17, 2023
The regulator alleged that the crypto firm used its stablecoin TerraUSD, to facilitate the fraud.
Nonetheless, Terraform disagrees with the SEC, stating that the watchdog lacks evidence that its assets are securities.
Meanwhile, the attention will switch to the upcoming fraud charges trial, set for 24 January 2024.
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