Lawyers representing Terraform Labs and its co-founder Do Kwon have requested summary judgment from a judge in New York in a lawsuit filed by the U.S. Securities and Exchange Commission (SEC).
This move could potentially prevent that case from progressing to a full trial.
The SEC previously filed a criminal complaint in February alleging that Terraform Labs offered or sold securities specifically referencing the algorithmic stablecoin Terra USD (UST), which collapsed in May 2022. However, attorneys for Terraform Labs and Kwon argue that the SEC did not provide sufficient evidence to support these allegations.
Despite two years of investigation, more than 20 depositions and more than two million pages of documents and data exchanged, attorneys claim the SEC has come no closer to proving any wrongdoing by Terraform Labs or Kwon. “The SEC has clearly failed to come close to proving that the defendants did anything wrong,” the attorneys said.
Southern District of New York Judge Jed Rakoff, who is presiding over the case, had previously rejected Terraform Labs and Kwon's attempt to dismiss the case.
Lawyers also criticized the SEC's allegations that Terraform Labs and Kwon secretly moved millions of dollars into Swiss bank accounts for personal gain. They called it “a clear attempt to portray this case as FTX, Celsius, and other cases involving the theft of customer funds.”
*This is not investment advice.