Terraform Labs and its co-founder Do Kwon’s representatives, defending that the individuals and institutions they represent are innocent, requested a decision to be made in the case filed by the Securities and Exchange Commission in New York without a trial.
The lawyers argued that the SEC failed to prove any securities sales, but relied on the complaint filed by the institution in February. The regulatory agency SEC had highlighted the famous algorithmic stablecoin Terra USD that collapsed in May 2022.
In their motion for summary judgment filed last week, the lawyers stated:
However, after a two-year investigation, more than 20 depositions, and an extensive discovery period with over two million pages of documents and data exchanged, the SEC is no closer to proving that the defendants did anything wrong.
The SEC had filed a lawsuit against Kwon and Terraform in February, alleging that the company raised billions of dollars by offering and selling a series of interconnected crypto asset securities, most of which were unregistered transactions.
SEC Chairman Gary Gensler, who became involved in the matter, also claimed that Terraform and Kwon failed to provide necessary information to investors, especially regarding LUNA and Terra USD.
Algorithmic stablecoins like Terra USD use market incentives through algorithms to maintain a stable price structure. Terra achieved this through the Luna coin. Eventually, Terra USD collapsed, resulting in the loss of billions of dollars.
Judge Jed Rakoff in the Southern District of New York had previously denied Terraform Labs and Kwon’s attempts to dismiss the case.
Bank Accounts in Switzerland
Kwon and Terraform also disputed allegations of personal gains directed at them by the SEC. These allegations claimed that the alleged gains, amounting to millions of dollars, were held in Swiss bank accounts.
According to the SEC’s claim, the company and Kwon transferred 10,000 Bitcoin to a Swiss-based financial institution. However, Kwon and Terraform’s lawyers stated that this allegation did not reflect the truth. The following statement was made regarding the matter:
As a more egregious example, the SEC transparently attempted to liken this case to FTX, Celsius, and other cases involving the theft of customer funds, claiming that the Defendants secretly moved millions of dollars to Swiss bank accounts for personal gain.
The SEC is currently refusing to comment on the request for summary judgment. According to information from Munhwa BroadcastingCo, in a separate case, the lawyers of Terraform Labs co-founder Daniel Shin continued to defend Shin. The statement given to the Seoul District Court regarding Shin stated that he had “no connection to the collapse.”
