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The judge presiding over the lawsuit involving Do Kwon, Terraform Labs, and the US SEC ruled that Kwon and his company violated US laws. In a summary judgment, Judge Rakoff found in favour of the SEC, ruling that Terraform failed to register LUNA and MIR as securities.
Federal Judge Jed Rakoff issued summary judgements siding with the SEC that Terraform Labs violated securities law when it illegally sold its cryptocurrencies to the public.
Judge Rules $LUNA and $MIR Token are Securities
According to Bloomberg and The Strait Times reports, Judge Jed Rakoff ruled in favour of the US Securities and Exchange Commission, agreeing that Do Kwon and his company Terraform Labs illegally sold unregistered securities to the public. The unregistered securities in question are $LUNA and Mirror Protocol ($MIR). According to The Strait Times and a report by Reuters, Judge Rakoff dismissed the SEC’s allegations that Terraform made transactions in unregistered security-based swaps. The civil trial is scheduled to begin on January 29, 2024.
Judge Rakoff’s decision aligns with the SEC’s argument that most cryptocurrencies should be classed as securities and regulated by the agency. Unfortunately for the SEC, Judge Rakoff’s ruling only allows the SEC to regulate LUNA and MIR.
The trial and charges against Terraform and Kwon stem from the implosion of Terra’s UST stablecoin in 2022. The SEC alleged that Kwon, Terra
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Author: Jana Serfontein
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