• The U.S. Securities and Exchange Commission (SEC) is arguing against Dentons’ motion to dismiss Terraform Labs and Do Kwon’s lawsuit.
• In a court hearing on June 15, Dentons submitted additional documents in support of its motion to dismiss the case.
• Judge Jed Rakoff will decide on the motion to dismiss the case by July 14.
SEC Argues Against Dismissal of Lawsuit
The U.S. Securities and Exchange Commission (SEC) has argued that the additional documents submitted by Dentons — the law firm representing Terraform Labs and Do Kwon — in support of its motion to dismiss the lawsuit lack adequate support for dismissing the case. The SEC’s counsel asserts that the Binance.US transcript and internal SEC emails presented by the defense are irrelevant to the current case, arguing that TerraUSD (UST) should be classified as a security under Howey test criteria for an “investment contract” classification.
Court Hearing on June 15
A court hearing was held on June 15th to determine if TerraUSD (UST) should be classified as a security under an “investment contract” criteria set out by Howey test guidelines. Lawyers representing Terraform Labs and Do Kwon used a U.S Congress hearing, Binance complaint, and Hinman emails document to counterargue against classifying UST as a security in their efforts for dismissal of the SEC lawsuit against them.
Regulatory Gap Regarding Crypto Assets
Dentons asserted that there is currently a regulatory gap when it comes to classifying digital assets such as UST as securities or not, emphasizing discussions within Congress about current regulation frameworks regarding digital asset issuance and stablecoin usage as evidence for this assertion. Additionally, they argued that the SEC is using internal emails related to “investment contracts” beyond its scope of power when determining security status of crypto assets such as UST .
Decision By July 14th
Judge Jed Rakoff presiding over this lawsuit will have handed down his decision on whether or not to grant dismissal of this case by July 14th 2021, after considering all evidence provided by both parties during court hearings including those supplementary documents provided by Dentons in support of their motion for dismissal .
Recap Of Events
To recap events so far: The lawyers representing Terraform Labs and Do Kwon attempted dismissal of their SEC lawsuit through providing supplementary documents containing evidence from Congress hearings, Binance complaints & Hinman emails in order argue that UST should not be classified as a security under Howey Test guidelines; however ,the United States Security & Exchange Commission argued back with assertions that these documentations were inadequate & irrelevant towards achieving dismissal & maintaining UST’s status as a security . A verdict from Judge Jed Rakoff will be delivered come July 14th 2021 deciding whether or not this case will be dismissed or proceed further .