Terraform Labs co-founder Do Kwon has requested a United States district choose to reject the securities and fraud swimsuit from the federal securities regulator, claiming it has didn’t show they did something incorrect.
In an Oct. 27 submitting to a New York District Court docket, legal professionals for Kwon and Terraform argued its cryptocurrencies Terra Luna Basic (LUNC), TerraClassicUSD (USTC), Mirror Protocol (MIR) and its Mirrored Belongings (mAssets) that mirror shares on-chain will not be 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 incorrect,” 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 had been false” — particularly, an allegation that Kwon and Terraform secretly moved tens of millions into Swiss financial institution accounts for their very own acquire.
In its swimsuit towards 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 incontrovertible fact that TFL had no clients, and thus no buyer funds.”
The $40 billion Terra ecosystem collapsed in Could 2022 after its USTC algorithmic stablecoin misplaced its U.S. greenback peg.
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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 referred to as “junk science.”
Choose Jed Rakoff, who oversees the case, denied Terraform’s earlier try and toss the lawsuit.
Kwon is at the moment detained in Montenegro and has beforehand requested the courtroom to reject the SEC’s movement to extradite and interview him within the U.S.
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