Terraform Labs Pushes Back Against SEC Over Special Counsel Payment
Crypto firm Terraform Labs filed a lawsuit against the US Securities and Exchange Commission on March 3, addressing the regulator’s recent objection over a $166M retainer paid to special litigation counsel Dentons.
The SEC previously argued that the crypto firm’s hefty payment constituted an attempt to avoid paying creditors. Terraform Labs refuted this claim, arguing in its court filing that the SEC’s objection amounts to “government overreach. They believe it seeks to distract and create a disadvantage for them.
Terraform Labs has a series of court cases to defend itself against, including a civil enforcement action and a grand jury investigation in the Southern District of New York (SDNY).
“The relief sought in the Motion will allow the Debtor to develop legal strategies, elicit testimony, and gather important facts from the Employees who are knowledgeable witnesses and have access to key information necessary to the Debtor’s defense of the SEC Enforcement Action,” the filing read.
The defunct crypto firm is now awaiting permission from the court to overrule the SEC’s objection and settle its legal fees. It claimed the objection threatens its daily business operations.
Dentons claimed Terraform Labs’ ability to defend itself would be severely affected if the court failed to overrule the objection.
While these concerns seem genuine, the SEC believes the crypto firm should not be allowed to settle attorneys or afford millions in dollars during its bankruptcy.
More specifically, the SEC revealed that Terraform Labs paid $122M into the Dentons Advance Payment Retainer within 90 days before its bankruptcy filing.
According to the financial regulator, both parties have a potential conflict of interest. As such, the major law firm
Read more on cryptonews.com
