Do Kwon’s lawyers pointed out that Coinbase does not list securities, and the SEC has not been given powers by Congress to regulate digital assets as securities or commodities.
The Terra Luna and Do Kwon case could head in a different direction after a South Korean court ruled that the renamed LUNC project is not a security product. As a result, Do Kwon’s lawyers were eager to ask the US Securities and Exchange Commission (SEC) to stop the legal pressure due to the lack of jurisdiction. His lawyers noted in a lawsuit that Terra LUNA was a global cryptocurrency that never participated in an Initial Coin Offering (ICO).
In addition, the lawyers argued that the sale of LUNA coins was never directed at anyone from the United States. Thus, the United States is denying the powers of the SEC over Do Kwon and Terra Luna UST.
TFL has not made any public offerings that require an SEC filing. The AC does not allege that the Defendants have solicited any sales of digital assets to the public anywhere. Sales of LUNA and MIR challenged tokens have been exempted from registration under various exemptions. The Defendants were not engaged in the minting of mAssets under the Mirror Protocol and did not solicit transactions on the Protocol by persons residing in the United States,” male.
As a result, Do Kwon’s lawyers asked the court to dismiss the charges due to insufficient factual statements. Court filings indicated that Terraform Labs is a Singaporean open source software development company that Kwon served as CEO. In its defense, Terra Luna UST notes that it is an algorithmic stablecoin that only serves to adjust the money supply in response to changes in demand.
In addition, Kwon’s lawyers pointed out that Coinbase does not list securities, and the SEC has not been given powers by Congress to regulate digital assets as securities or commodities?
What’s next for Do Kwon and Terra Luna’s victims?
A recent South Korean law enforcement investigation revealed that Do Kwon had no physical assets such as homes, cars, or land that could be liquidated for the benefit of the Terra victims. Since Terra Luna’s clients were international, the case became more complicated to identify the victims. Furthermore, Terra Protocol has provided services for decentralized financial protocols and centralized exchanges to mint and modify LUNA and UST.
In turn, DeFi and CEX protocols offered Terra Luna and UST tokens to their clients. As a result, the true value may not be fully understood for affected users since some protocols such as FTX have since collapsed.
However, Do Kwon is still on trial on fraud charges after he was caught trying to flee to Dubai in Montenegro.
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