Terraform Labs asks a judge to have a jury decide whether UST and LUNA tokens are securities.

Terraform Labs, creator of the failed Terra stablecoin (UST) Luna

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The cryptocurrency asked a New York judge to have a jury decide the token’s regulatory status. On the other hand, the Securities and Exchange Commission argues that this issue should be decided by a judge.

SEC be sued Terraform Labs and co-founder Kwon Do claimed in February that he raised billions of dollars from investors “by offering and selling interconnected crypto-asset securities, much of it through unregistered transactions.”

David Kornblau, an attorney for Terraform Labs, said in a letter to Jed Rakoff on Monday that a jury must decide “whether the SEC has met its burden of proving” that the UST, LUNA wLUNA and MIR tokens are securities. The letter follows one filed by the SEC asserting that juries rarely decide whether something is an investment contract or not.

Whether cryptocurrencies should be considered securities is the subject of several legal battles between the SEC and cryptocurrency companies. If a token meets the definition of an investment contract, typically using the so-called Howey test, the issuer must register with the SEC and disclose certain information to investors.

summary judgment

Formerly Terraform Labs asked The judge will grant summary judgment in favor of the defendant instead of sending the case to a full trial. However, if the judge decides not to grant summary judgment, Terraform Labs is requesting that the matter be submitted to a jury.

The company pointed to past examples. Ode vs. mane, a 2021 case in which a jury decided that four cryptocurrencies were not securities. In response, the SEC argues that this was the only case in which a jury was asked to determine whether something was an investment contract or not. The agency also claims there is “no real dispute” that Terraform Labs sold securities.

Kwon Do be arrested Last March, he was accused of using a fake passport in Montenegro. District court at the end of November Approved his guidance.

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