Terraform Labs co-founder Do Kwon has requested a United States district decide to reject the securities and fraud go well with from the federal securities regulator, claiming it has did not show they did something flawed.
In an Oct. 27 filing to a New York District Courtroom, legal professionals for Kwon and Terraform argued its cryptocurrencies Terra Luna Basic (LUNC), TerraClassicUSD (USTC), Mirror Protocol (MIR) and its Mirrored Property (mAssets) that reflect stocks on-chain are usually not securities because the Securities and Trade Fee alleged.
“After two years of investigation, the completion of a discovery interval that resulted in the taking of greater than 20 depositions, and the alternate of over two million pages of paperwork and information, the SEC is evidentiarily no nearer to proving that the Defendants did something flawed,” the legal professionals wrote.
They added the “proof doesn’t exist to help lots of the SEC’s claims” and asserted the regulator “knew a few of its allegations have been false” — specifically, an allegation that Kwon and Terraform secretly moved thousands and thousands into Swiss financial institution accounts for their very own achieve.
In its suit against Kwon and Terraform filed in February, the SEC claimed the pair despatched 10,000 Bitcoin (BTC) to a Swiss monetary establishment and withdrew $100 million. It additionally claimed they dedicated fraud by “repeating false and deceptive statements.”
“The SEC knew this allegation was false when it filed this case,” Kwon’s legal professionals wrote. ”That is made even worse by the undisputed proven fact that TFL had no clients, and thus no buyer funds.”
The $40 billion Terra ecosystem collapsed in May 2022 after its USTC algorithmic stablecoin misplaced its U.S. greenback peg.
Kwon and Terraform additionally moved to exclude the opinion of the SEC’s consultants together with a report from Rutgers College economics professor Bruce Mizrach which they known as “junk science.”
Choose Jed Rakoff, who oversees the case, denied Terraform’s earlier attempt to toss the lawsuit.