Last Updated on December 7, 2023 by Bitfinsider
Terraform Labs, the developer of the failing Terra stablecoin (UST) and LUNA cryptocurrency, has sought a New York judge to allow a jury evaluate the tokens’ regulatory validity. The Securities and Exchange Commission, on the other hand, is adamant that the dispute be settled by a judge.
In February, the SEC filed a lawsuit against Terraform Labs and its co-founder Do Kwon, alleging that they generated billions of dollars from investors by “offering and selling an interconnected suite of crypto asset securities, many in unregistered transactions.”
Terraform Labs lawyer David Kornblau stated in a letter to judge Jed Rakoff on Monday that a jury should decide “whether or not the SEC has met its burden to prove” that UST, LUNA wLUNA, and MIR tokens are securities. The letter came after one from the SEC, in which the agency stated that a jury nearly never decides whether or not something is an investment contract.
Terraform Labs has earlier requested that the judge deliver a summary judgment in favor of the defendant rather than a full trial. If the judge declines to award a summary judgment, Terraform Labs will request that the case be heard by a jury.
The business cited Audet vs. Fraiser, a 2021 case in which a jury determined that four cryptoassets were not securities. The SEC, for its part, claims that it was the only instance in which a jury was required to determine whether or not anything was an investment contract. The government also claims that “there is no genuine dispute” about Terraform Labs selling securities.
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