Terraform Labs, Do Kwon file motion to dismiss SEC lawsuit

Oct. 30, 2023

By Assad Jafri

Terraform Labs and its co-founder Do Kwon filed a motion for summary judgment with a federal court, asking the judge to dismiss the SEC’s securities fraud lawsuit against it.

Terraform Labs collapsed in May 2022 after its native token LUNA lost 99% of its value when the linked algorithmic stablecoin UST lost its peg to the dollar. The event caused more than $60 billion in losses for investors and has led to lawsuits in multiple countries, including South Korea and the U.S.

Kwon was arrested in Montenegro in 2023, where he is currently serving a four-month sentence for the use of forged documents. Both the U.S. and South Korea are seeking extradition so he can be prosecuted for his role in the collapse.

Motion to dismiss

Terraform argued in the filing that the SEC had failed to prove that Terraform Labs was selling securities or committing fraud. The company claims that the regulator has provided no evidence to back any of the allegations made in the lawsuit.

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