In a recent court hearing, lawyers representing Terraform Labs and its founder, Do Kwon, made significant progress in their attempt to dismiss the lawsuit filed by the United States Securities and Exchange Commission (SEC).
Dentons, the law firm representing the defendants, presented additional documents to support their motion to dismiss, which challenged the SEC’s classification of TerraUSD (UST) as a security.
The SEC’s legal counsel argued that the documents presented by Dentons, including the Binance.US transcript and internal SEC emails, were irrelevant to the case at hand.Â
They maintained that UST should be considered a security under the Howey test, which defines an “investment contract.”
Dentons countered by emphasizing the practical purpose of UST as an algorithmic stablecoin and highlighting a regulatory gap in the classification of digital assets. They also criticized the SEC for relying on internal emails related to “investment contracts” to determine the security status.
Judge Jed Rakoff, presiding over the case, announced that a decision on the motion to dismiss would be issued by July 14, indicating the court’s commitment to a fair and timely resolution.
Dentons’ representation of Kwon in previous legal battles against the SEC and their successful efforts in securing bail for Kwon and former Terra CTO Han Chang-Joon in Montenegro reflect the law firm’s commitment to defending its clients’ interests.
As the case unfolds, it highlights the ongoing debates surrounding digital asset regulation and stablecoin issuance, adding to the urgency for clear and comprehensive regulatory frameworks in the United States.
Dentons’ compelling arguments and the court’s attentiveness to the evolving landscape of cryptocurrency regulation present a positive outlook for Terraform Labs and Do Kwon’s defense in the face of the SEC lawsuit.
Also Read: Montenegro Court Evaluate Extradition, Do Kwon Remains in Custody
