Terraform Labs (Luna) Co-Founder Pleads US Court to Dismiss SEC's Fraud Allegations

blockchain.news:

The United States Securities and Exchange Commission (SEC) has filed claims of fraud and securities violations against Terraform Labs. Together with the company's co-founder, Do Kwon, Terraform Labs is vigorously pursuing a dismissal of these charges from a U.S. District Court. The legal representatives for Kwon and Terraform Labs argued in a document that was submitted on October 27 to the United States District Court for the Southern District of New York that the cryptocurrencies Terra Classic (LUNC), TerraClassicUSD (USTC), Mirror Protocol (MIR), and mirrored assets (mAssets) are not securities as asserted by the SEC. The document was filed in response to the SEC's claim that the cryptocurrencies are securities.

They emphasised that there is a lack of evidence to corroborate many of the SEC's charges, and this was a major point of emphasis for them. The defence team vigorously refuted a particular claim, which said that Kwon and Terraform Labs had clandestinely moved millions of dollars into bank accounts in Switzerland for the purpose of enriching Kwon personally. The dispute centres on a claim that 10,000 Bitcoin were transferred to an account at a Swiss bank, resulting in the subsequent withdrawal of $100,000 from the financial institution. They emphasised, «The SEC knew this allegation was false when it filed this case,» which gave insight on what was seen as disinformation provided by the SEC.

Constant allegations from the SEC

The action that was brought by the SEC in February posited fraudulent behaviour by Kwon and Terraform Labs. This was a significant setback for the once thriving $40 billion Terra ecosystem, which came to an end in May 2022 when the TerraUSD (UST) stablecoin lost its peg to the United