Terra Co-Founder Requests Revocation of SEC Charges

04/25/2023 12:56 • Blockchain Briefs • 97 views

According to reports, according to a legal document, Terra co founder Do Kwon has requested the revocation of the charges filed against him by the US Securities and Exchange Commission (SEC). Do Kwon argues that the SEC’s claims are invalid and refutes the agency’s position that tokens, including MIR, LUNA, and UST, are securities.

Do Kwon seeks to withdraw the SEC’s charges against him

Introduction

Do Kwon, the co-founder of Terra, has recently filed for the revocation of charges filed against him by the United States Securities and Exchange Commission (SEC). In a legal document, Kwon argues that the SEC’s claims are invalid and refutes the agency’s position that tokens, including MIR, LUNA, and UST, are securities. This article will dive deeper into the situation, Kwon’s arguments, and the potential outcome of this case.

Background Information

Terra is a blockchain-based payment system that aims to provide a fast and reliable payment solution by connecting traditional finance with the blockchain technology. Terra has issued several tokens, including MIR, LUNA, and UST, which have been traded on different exchanges. However, the SEC views these tokens as securities, subject to their regulatory requirements.

The SEC’s Allegations

The SEC alleges that Kwon and Terra have violated the securities law by offering and selling tokens without registering them with the SEC. The SEC further alleges that Kwon and Terra misled investors by claiming that the tokens had investment value, making them subject to SEC regulations.

Kwon’s Defense

Do Kwon and his legal team have challenged the SEC’s claims and have requested revocation of the charges. In a legal document submitted to the US district court of Southern New York, Kwon argues that the SEC’s allegations are without merit.
Kwon introduces several arguments in his defense. Firstly, he argues that Terra’s tokens are not securities but serve a utility function, as they are used within the Terra payment system. He also argues that the SEC’s lack of clear guidelines on digital assets makes it difficult for companies to comply with regulations.
Kwon further contends that the SEC has overlooked significant facts in its allegations, such as the fact that Terra didn’t offer its tokens to U.S. citizens, and the purchases of its tokens were not investments but served a genuine utility function. Kwon’s legal document states that, “the Commission’s pleadings ignore fundamental facts concerning Terra’s role in minting and distributing Terra’s stablecoin, UST, and the function of the payment and settlement network on which Terra operates.”

The Future of the Case

The case between Kwon, Terra, and the SEC is still ongoing. Do Kwon’s defense is strong, and his legal team is confident that the allegations will eventually be dropped. If Do Kwon’s team successfully defends Terra’s token as a utility token and not a security token, it could set a significant precedent for the digital asset industry.

Conclusion

Do Kwon’s decision to file for revocation of the charges filed against him by the SEC is viewed as a bold move. If this case in Terra’s favor, it could set a significant precedent for the crypto industry, as it would be the first time that the SEC loses such a case. Until then, the crypto industry will continue to wait with bated breath and wonder what’s next.

FAQs

1. What is Terra?
Terra is a payment system that connects traditional finance with blockchain technology, providing fast and reliable payment solutions.
2. What tokens are involved in the case between Do Kwon and the SEC?
MIR, LUNA, and UST are the tokens involved in the case between Do Kwon and the SEC.
3. Why is the case significant for the crypto industry?
If Kwon and Terra win the case, it could set a significant precedent for digital asset regulations, as it would be the first time the SEC loses such a case.

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