The US Securities and Exchange Commission (SEC) has asked the court for a summary judgment in its case against Terraform Labs and its founder, Do Kwon.
In a court filing, the government agency said that there is no dispute over purchasers making investments directly through fiat or crypto assets, which gives a basis to its argument that Do Kwon and Terraform sold securities.
The SEC says that the investment made with the expectation of profiting from the company’s growth satisfies the Howay test and essentially gives judgment in their favor.
This move from the agency comes as Kwon’s defense team recently filed a similar request to the court asking to favor them as the SEC has not yet proved Terraform Labs sold or offered securities.
Furthermore, a filing from the SEC also highlighted that Terraform Labs and Do Kwon were engaged in fraud while making misleading statements about the stability of UST, an algorithmic stablecoin created by Terraform Labs.
The SEC claimed that the project Terra (LUNA) falsely credited its price stability algorithms while secretly forming an entry for third-party intervention, which caused the collapse of the entire project and drained billions of dollars from its users.
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