SEC 1 - Cryptos 0. A Judge Declares That LUNA And TerraUSD Were Securities

✍️ 29 December, 2023 - 7:40 👤 Editor: Jakub Motyka

• A US federal judge has determined that Terraform Labs violated securities laws by selling unregistered cryptocurrencies.
• The decision could have significant implications for cryptocurrency regulation, setting an important precedent in SEC scrutiny.
• The latest news about cryptos on our Telegram channel.

Terraform Labs, the company behind the Terra and Luna, has been found guilty of violating US securities laws for selling her cryptocurrencies to the public without proper registration.

This indictment, issued by Judge Jed Rakoff of the U.S. District Court for the Southern District of New Yorkmarks a significant milestone in the regulation of cryptocurrencies and aligns with many statements from the SEC regarding projects such as Do Kwon.

UST, LUNA, wLUNA And MIR From Terraform Labs Were Securities And Must Be Treated As Such, Says The Judge

Judge Rakoff has ruled that there is no doubt that UST, LUNA, wLUNA and MIR are securities because they are investment contracts, thus supporting the position of the SEC (Stock Exchange Commission). and US Securities) regarding many of these cryptocurrencies.

This court decision not only highlights the unregistered sale of the native LUNA and MIR tokens, but also opens the door to a jury trial on the alleged fraud by Do Kwon and Terraform Labs valued at $40 billion, with accusations of secret agreements by the project's founders to artificially justify the $1 value of the stablecoin TerraUSD.

The decision represents a hard setback for the cryptocurrency industry's interpretation of securities law and departs from a separate decision in the Southern District of New York over the Ripple token (XRP). This ruling reinforces Rakoff's argument that Terraform's sale of crypto assets constituted an unregistered security.

However, Rakoff has left one issue in the case unresolved: the fraud allegations related to the separation from UST brought by the SEC. These allegations are expected to be heard before a jury.

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