SEC Dismisses Jury's Verdict on Terraform Labs, Demands Summary Judgement; Citadel Securities Dragged into Controversy
Summary:
The U.S. Securities and Exchange Commission (SEC) is disputing a jury's conclusions on Terraform Labs' alleged violations and is demanding a summary judgment on all claims. The SEC alleges that Do Kwon, associated with Terraform Labs, misled cryptocurrency investors through deceptive practices. Terraform Labs has asked the judge to dismiss the SEC lawsuit, arguing their products and protocols are not securities. Meanwhile, as explanations for Terra's ecosystem collapse emerge, part of the blame is being directed at Citadel Securities for allegedly destabilizing Terra's stablecoin in 2022.
The U.S. Securities and Exchange Commission (SEC) has dismissed the jury's determination on the suspected infringements by Terraform Labs and is calling for a summary judgment on all claims. A court document dated October 27 highlights SEC's disagreement with the jury's soft approach towards Do Kwon and his role in enabling the scams that eventually brought down Terraform Labs. This document aimed at the US District Court - Southern District of New York, stated that no rational jury could deny Kwon's liability for the infractions made by Terraform under the Exchange Act Section 10(b) and Rule 10b-5.
The SEC argues that the proof of these violations revolves around Kwon's role in deceiving cryptocurrency investors. This deception involved the creation and promotion of Terra and their in-house Terra (LUNA) tokens as securities. On the same day, both Do Kwon and Terraform Labs implored the judge to dismiss the SEC's lawsuit, insisting that various Terra products and protocols do not constitute securities, contrary to the SEC's claims.
Despite these pleas, the SEC stands firm on its contention that Kwon and Terraform Labs engaged in the offering and sale of securities, executed unauthorized transactions involving LUNA and MIR, participated in transactions involving mAssets, and facilitated fraudulent activities.
In related news, as Terra co-founder Daniel Shin’s legal representative attributes the collapse of the Terra ecosystem to the mismanagement of the Anchor Protocol and external attacks initiated by Do-hyung Kwon, the company has recently pinned blame on market maker Citadel Securities. It stated that Citadel Securities played a part in a planned, deliberate attempt to destabilize its TerraUSD (UST) stablecoin in 2022.
In response, Citadel Securities informed Cointelegraph with a statement saying, "This baseless motion is grounded on incorrect social media posts and overlooks information we already supplied proving we held no involvement in this situation whatsoever.
Published At
11/3/2023 6:59:39 AM
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