Lawyers for Do Kwon, founder of the sunken cryptocurrency ecosystem Terra (LUNA), have asked the judge to dismiss the SEC's lawsuit accusing him of fraud in connection with the $40 billion collapse of the TerraUSD and LUNA cryptocurrencies last year.
Friday's statement indicates that Kwon will continue to plead not guilty in the face of increasing legal pressure.
His home country, South Korea, issued an arrest warrant for Kwon in September, and US prosecutors indicted Kwon on fraud charges in March.
Kwon has not officially responded to the fraudulent charge in Montenegro or the criminal charges in the United States, which are similar to the SEC's charges in the civil suit.
Do Kwon Argues SEC Has No Power To Sue Terra
Kwon's lawyers said on Friday that the SEC does not have the authority to sue because he did not market his cryptocurrencies directly to Americans. They also said that neither TerraUSD, a stablecoin designed to hold the $1 value, nor LUNA, are SEC-regulated securities.
"UST is a currency, not a security," the statement said, referring to TerraUSD by the abbreviation symbol.
Kwon's lawyers also contested the SEC's claim that Kwon lied about the connection between the Terra blockchain, the technology underlying TerraUSD, and Chai, a South Korean payment application.
The SEC filed a lawsuit in February, accusing Kwon of saying on several occasions that transactions in Chai were handled using Terra stablecoins.
*Not investment advice.