Terraform Labs says its resolution to file for chapter will support it in pursuing an attraction of the lawsuit it faces from the US Securities and Change Fee.
In a Jan. 30 submitting to a Delaware Chapter Courtroom, Terraform Labs CEO Chris Amani wrote that its Chapter 11 chapter was vital to efficiently interesting its case with the SEC. The agency — which created the now-defunct stablecoin TerraClassicUSD (USTC) — filed for chapter on Jan. 21.
An attraction towards the SEC would sometimes require Terraform Labs to entrance up a “supersedeas bond” of 110% of the whole judgment earlier than it may proceed. Nevertheless, Chapter 11 chapter protections may enable the agency to lodge an attraction while not having to publish the bond.
“A profitable attraction would eradicate the only largest declare towards the Debtor, thereby benefiting the Debtor, its collectors, and the neighborhood extra broadly.”
Within the submitting, Amani wrote that the agency’s upcoming attraction will argue the SEC doesn’t have the requisite authority to cost the agency or its co-founder Do Kwon.
He argued Terraform Labs’ crypto belongings can’t be referred to as securities and claimed the case falls exterior the SEC’s jurisdiction.
Moreover, Amani claimed Terraform Labs’ treasury holds roughly $28 million in Bitcoin (BTC), $7 million of “varied” different cryptocurrencies and roughly $87 million in Luna (LUNA) tokens.
Associated: Coinbase argues shares, Terraform Labs and Howey in 5-hour SEC face-off
The SEC filed civil prices towards Terraform Labs and Kwon in February 2023, accusing each of orchestrating a “multibillion-dollar crypto asset securities fraud” involving the token previously often called UST and LUNA.
The most recent submitting comes almost two weeks after the SEC agreed to postpone Kwon’s upcoming fraud trial to March 25 after receiving a request from his authorized group to delay the proceedings.
Kwon’s Terra Cash ecosystem collapsed in Might 2022. Shortly after the agency imploded, his whereabouts remained unknown till he was arrested in Montenegro in March 2023 after trying to flee the nation with falsified journey paperwork.
The U.S. and Kwon’s residence nation of South Korea are searching for his extradition, with Kwon doubtlessly subjected to a number of sentences in each international locations.
If Kwon is extradited to South Korea, he may face a 40-year jail sentence the place he’s alleged to have dedicated nearly all of his crimes.
Massive Questions: How can Bitcoin funds stage a comeback?
