Troubled Terra (LUNA) founder Do Kwon is being placed under house arrest in Montenegro after posting bail. According to a new document released by Montenegrin authorities, Do Kwon and Han Chang-Joon, Terra’s former chief financial officer, have paid $435,000 each to post bail but will be forced to stay under house arrest until the end […]
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South Korean authorities are looking to extradite embattled Terra (LUNA) founder Do Kwon months after he was found in the Eastern European nation of Montenegro. According to a new report from The Wall Street Journal, the leading prosecutor in the case says that bringing Kwon back to South Korea would be the best way to […]
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Federal securities laws only apply in the United States, but the protocols were developed overseas, argues Terraform Labs.
Terraform Labs is seeking to have a class action lawsuit against the firm dismissed, arguing the United States securities laws referenced are not applicable to its foreign-developed protocols.
On May 3, Terraform Labs requested a California federal judge dismiss an investor suit brought by Nick Patterson that claimed the company sold unregistered securities and misled investors.
The firm’s attorneys, Dentons, argued that federal securities laws do not apply since the protocols were developed and used outside of the United States.
The Terra/Luna ecosystem collapsed in May 2022, wiping out billions from the crypto markets. The crash has sparked a raft of lawsuits against the firm, associated entities such as the Luna Foundation Guard, and company founder Do Kwon.
In June 2022, this particular class action was filed, claiming that the Terra tokens (UST and LUNA) were securities, among other allegations.
According to Law360, Terraform’s dismissal motion argued that federal securities laws and the mail and wire fraud accusations in the suit only apply domestically.
“The federal securities laws do not apply because the SAC [Second Amended Complaint] does not allege that any of the protocols at issue were developed domestically.”
The same argument also applies to the suit’s RICO (Racketeer Influenced and Corrupt Organizations) allegations, which claimed the firm’s goal was to reap profits at retail investors’ expense, according to Terraform.
Nick Patterson, who filed the suit on behalf of investors, did not adequately plead that mail and wire fraud allegations occurred domestically, it argued.
The motion also states that the plaintiff failed to identify the location of digital wallets containing his Terra tokens, which negates any “domestic injury” claims, according to Terraform.
Related: Do Kwon converted illicit funds from LUNA to Bitcoin: S.Korean prosecutors
Terraform and Do Kwon were sued by the Securities and Exchange Commission in February, with the regulator claiming they orchestrated a multibillion-dollar securities fraud.
In April, a South Korean court ruled that LUNA was not a security under the country’s Capital Markets Act.
On April 25, Terraform Labs co-founder Hyun-seong Shin and nine individuals associated with the firm were indicted in South Korea.
They were reportedly indicted on charges of fraud, breach of trust and embezzlement and referred to trial following almost a year of investigation.
Magazine: Crypto regulation — Does SEC Chair Gary Gensler have the final say?
Terraform Labs (TFL) and its co-founder Do Kwon have requested the dismissal of the charges brought against them by the U.S. Securities and Exchange Commission (SEC). In a new court filing, Kwon pushes back against charges related to the alleged violation of securities registration and anti-fraud provisions in relation to TFL’s stablecoin, TerraUSD (UST), and […]
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Attorneys defending the co-founder of Terraform Labs, Do Hyeong Kwon, also known as Do Kwon, have presented their argument that says the U.S. Securities and Exchange Commission (SEC) has no jurisdiction in the matter. The legal team asserts that U.S. law precludes regulators “from using federal securities law to assert jurisdiction over the digital assets […]
Disgraced crypto entrepreneur Do Kwon is embroiled in new legal trouble as authorities in Montenegro formally charged him with a case of forgery. According to a new report from Bloomberg, Montenegrin prosecutors filed an indictment for the Terraform Labs co-founder and his chief financial officer Han Chang-Joon for allegedly forging personal documents. Kwon is currently […]
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According to the recent complaint by the U.S. Securities and Exchange Commission (SEC) against Bittrex, the securities regulator insists that a few crypto asset tokens were offered and sold as investment contracts and are securities. The news follows the SEC’s designation of several crypto assets as securities, including the case against Terraform Labs, which insists […]
Prosecutors investigating failed blockchain firm Terraform Labs have found out that its Singapore office sent millions of U.S. dollars to lawyers just before the crash of its cryptocurrencies. According to Korean media, the transfers suggest that co-founder Do Kwon was aware of the imminent collapse. Terraform Labs Transferred Large Amounts of Money to South Korean […]
South Korean authorities have confiscated assets worth millions of dollars from the employees of the blockchain firm Terraform Labs, according to a report. The report by KBS News says that prosecutors in Seoul have seized real estate and other assets worth approximately $160 million from eight employees of the blockchain firm behind the collapsed Terra […]
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