A US judge ruled in favor of the Securities and Exchange Commission (SEC) regarding allegations that Terraform Labs and its founder Do Kwon offered and sold unregistered securities. The decision was recently announced by a court decision.
“There is no real disagreement that UST, LUNA, wLUNA and MIR are securities because they are investment contracts,” Rakoff said.
The court denied both parties' motions for summary judgment on the fraud allegations, and those motions will now go to a jury, according to the filing.
The jury trial is expected to begin on January 29, 2024.
The US Securities and Exchange Commission (SEC) had accused Singapore-based Terraform Labs and its founder Do Kwon of orchestrating a multibillion-dollar crypto asset securities fraud.
According to the SEC criminal complaint, from April 2018 until the scheme's collapse in May 2022, Terraform and Kwon raised billions of dollars from investors by offering and selling an interconnected group of cryptoasset securities, many in unregistered transactions.
The SEC's complaint alleged that Terraform and Kwon marketed crypto asset securities to investors looking to make a profit and repeatedly claimed that the value of the tokens would increase.
In May 2022, the UST stablecoin collapsed in the first place, and then when billions of LUNA, which had an algorithm to fix it to 1 dollar, started to be printed, the price of this altcoin also collapsed.
*This is not investment advice.