Terraform Labs, the blockchain company, has achieved a partial victory in a case brought against it by the U.S. Securities and Exchange Commission (SEC). Judge Jed Rakoff issued a summary judgment in favor of Terraform Labs, stating that the firm did not engage in transactions involving security-based swaps. However, the judge also ruled that various assets, including Terraform’s UST, LUNA, wLUNA, and MIR tokens, are investment contracts and therefore securities. He further declared that these sales were unregistered and in violation of the Securities Act.

The judge noted that the SEC’s request for summary judgment did not address any potential financial remedies, which will be determined after liability is established through another summary judgment. Additionally, the judge stated that fraud claims brought by the SEC must be resolved at trial, as they involve genuine disputes of material fact.

The fraud claims center around two issues. Firstly, the SEC alleges that Terraform Labs co-founder Do Kwon reached an agreement with Jump Crypto to assist in the recovery of Terra’s UST stablecoin, despite publicly claiming that the recovery was solely due to Terra’s algorithm. Secondly, the SEC questions whether Chai Corp., a South Korean payments company founded by Terraform Labs co-founder Daniel Shin, actually utilized the Terra blockchain as advertised.

The fraud trial is scheduled to take place on January 29, 2024, according to the latest filing.

This News Article was automatically generated by Bob the Bot (AI)

Information	Details
Geography	North America
Countries	🇺🇸
Sentiment	neutral
Relevance Score	1
People	Daniel Shin, Do Kwon, Jed Rakoff
Companies	Chai Corp., Jump Crypto, U.S. Securities and Exchange Commission (SEC), Terraform Labs
Currencies	Mirror Protocol, Terra Luna Classic, wluna, ust
Securities	UST, wLUNA, MIR, None, LUNA