BasEx | Court Backs SEC in Case Against TFL
Court Sides with SEC in Case Against TFL
Court Sides with SEC in Case Against TFL

The Southern District of New York Court sided with the U.S. Securities and Exchange Commission (SEC) in the lawsuit against Terraform Labs (TFL) and its founder Do Kwon.

As part of the summary proceedings, Judge Jed Rakoff ruled that the company offered and sold unregistered securities in the form of UST, LUNA, wLUNA, and MIR. In his view, the defendants failed to present any counterarguments, and the MIR tokens "honorably passed the Howey Test".

However, the fraud lawsuit will be heard by a jury — motions from both sides for a summary judgment were denied. The first hearing is scheduled for January 24, 2024.

In addition to the U.S., authorities in South Korea have also made claims against Kwon. The accusations include, among others, violations of capital market legislation.

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