As a researcher with a background in securities law and experience following cases involving cryptocurrencies, I find Terraform Labs’ (TFL) argument against the Securities and Exchange Commission’s (SEC) proposed remedies intriguing. Based on the information provided in this article, it appears that TFL is challenging the SEC’s request for $5.3 billion in disgorgement, interest, and civil penalties following a jury finding of securities fraud.
The SEC has planned a hearing on May 22 to review suggested solutions in its ongoing case against Terraform Labs (TFL) and its co-founder Do Kwon in the US. TFL, however, disagrees with the SEC’s proposed ruling and advocates for a significantly different decision.
Lawyers representing crypto firm Terraform countered SEC’s call for a final judgment on May 1st by contending that the regulatory body was not justified in seeking $5.3 billion in disgorgement, interest, and penalties. They reiterated Terraform’s earlier stance, stating that any disgorged funds would essentially need to come from the Luna Foundation Guard (LFG), a non-involved party in the civil lawsuit.
Based on Terraform’s legal representatives, the SEC did not present any proof that the platform or Kwon’s actions within the US led to the damages in question for the ongoing civil lawsuit. If the SEC were to pursue disgorgement and civil fines, Terraform argues this would grant the commission an injunction with unlimited jurisdiction.
In the filing made on May 1st, TFL’s token transactions and sales primarily took place outside the United States. The Securities and Exchange Commission (SEC) has not presented any proof that the defendants’ minimal activities within the U.S. led to any losses, let alone the substantial amount of disgorgement sought by the SEC.
As a researcher examining legal filings, I came across an intriguing development in the ongoing dispute between Terraform and the SEC. In their April 26 submission, Terraform argued that imposing a civil penalty of $1 million would be more fitting than the SEC’s suggested multibillion-dollar penalty. This perspective was echoed by Do Kwon, currently residing in Montenegro and under extradition orders from both the U.S. and South Korea, in his objections to the SEC’s proposed remedies for the civil case.
Lawyers for Terraform co-founder Mr. Kwon argue that the Securities and Exchange Commission (SEC) needs to prove that his actions, which were carried out exclusively in Korea and Singapore, had a significant impact on the US market.
As a crypto investor following the Terraform Labs case closely, I can share that a jury recently determined that Terraform and its founder Do Kwon were accountable for defrauding investors during a two-week trial with the SEC. The next step involves all parties presenting their proposed remedies before Judge Jed Rakoff on May 22. However, it remains uncertain if Kwon will attend this hearing due to his legal predicament in Montenegro.
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2024-05-03 01:43