US Securities and Exchange Commission (SEC), cryptocurrency He requested the court, which presided over his lawsuit against the exchange Binance, to take into account the latest decision regarding Terraform Labs.
SEC Requests Judge to Consider Terraform Labs Decision in Binance Case
Terraform decision UST, LUNA, wLUNA And of MIR It determined that it was a security under the Howey test. The SEC claims that Binance-related stablecoin BUSD is also a security, making the Terraform decision relevant to its case.
The SEC highlighted that a previous motion to dismiss filed by BAM Management and BAM Trading in September referenced Terraform. In its request for rejection, BAM argued that the money deposited into Gram, Kin or LUNA went to the backer, who then used the money to build the blockchain, provide functionality for the tokens or offer yield-generating tokens.
At the time, Terraform’s lawsuit did not support the SEC’s unprecedented investment covenant theory. In fact, lawyers argued that this supported BAM’s position.
However, in the most recent ruling in Terraform, the judge declared the Howey test to be a statement of law. Judge Jed Rakoff also stated that the UST was not a standalone security because buyers understood that its value would remain fixed at $1 instead of making a profit, but this changed in March 2021. UST holders would be able to deposit their tokens into Anchor Protocol, which was developed through the defendants’ efforts and which Kwon himself publicly announced would provide “by far the highest stablecoin return on the market” with a “target” of “20% fixed return.”
Judge Jed Rakoff’s determination that “the offering and sale of UST constitutes an investment contract because UST investors can deposit UST in a protocol that Terraform has developed and promotes as a profit-generating opportunity”, the institution claims, undermines the SEC’s argument against the offer and sale of BUSD. supportive.
The SEC argued that “the court’s analysis of Terraform defendants’ so-called ‘stablecoin’ UST is particularly relevant to this Court’s consideration of Defendants’ arguments regarding Binance’s so-called ‘stablecoin’ BUSD and Defendants’ staking-as-a-service, BNB Vault, and Simple Earn programs.” .
*This is not investment advice.
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