The Judge of the U.S. District Court for the Southern District of New York has sided with the SEC in the agency’s case against Terraform Labs and its co-founder, Do Kwon, who allegedly sold unregistered securities.
According to the court document, the court has granted summary judgment for the SEC’s claim, while Judge Jed Rakoff is also siding with Terraform Labs on its claims of transacting security-based swaps.
“There is no genuine dispute that UST, LUNA, WLUNA, and MIR are securities because they are investment contracts,” said Judge Rakoff.
The SEC charged Terraform and Do Kwon with multi-billion-dollar crypto fraud after the dramatic collapse of the Terra project.
The law enforcement agency said that Terraform and Kwon raised billions from investors by selling unregistered securities in the form of mAssets, which – according to the SEC – are security-based swaps for mirroring stock prices and used to pay returns to investors.
However, the court has denied a motion from the defense team asking to exclude two SEC officials from testimony while also rejecting the SEC’s motion asking to exclude the testimony of defense expert Dr. Terrence Hendershott.
The case will now go on trial starting in January, with jury selection scheduled for January 24.
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