SEC argues against Dentons’ motion to dismiss Terraform and Do Kwon’s lawsuit
Lawyers representing the United States Securities and Exchange Commission (SEC) have argued that the additional documents submitted by Dentons — the law firm representing Terraform Labs and Do Kwon — in support of its motion to dismiss the lawsuit lack adequate support for dismissing the case.
The SEC’s counsel asserts that the Binance.US transcript and internal SEC emails presented by the defense are irrelevant to the current case. They argue that the Howey test clearly defines the parameters of an “investment contract” and contend that TerraUSD (UST) should be classified as a security.
In a court hearing on June 15, Dentons submitted supplementary documents to bolster its motion to dismiss the lawsuit filed by the U.S. SEC. The focus of the hearing was to determine if the digital assets developed by Terraform Labs should be classified as securities under the criteria of an “investment contract.“
Dentons assert that the algorithmic stablecoin, UST, is not classified as a security, emphasizing its practical purpose rather than an investment contract. In support of its motion to dismiss the lawsuit, it submitted supplementary documents, which include the U.S. House Financial Services Committee hearing on digital asset regulation and stablecoin issuance, the SEC’s request for a restraining order against Binance.US, and the Hinman emails from the SEC vs. Ripple lawsuit.
Related: Do Kwon could serve prison in both US and South Korea, prosecutor says
The defense lawyers highlighted a “regulatory gap” regarding the classification of crypto assets as securities, particularly as the U.S. Congress engages in discussions about regulatory frameworks for digital assets and stablecoin issuance. Additionally, they argued that the
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