Do Kwon Lawyers: SEC Has No Terra Jurisdiction – Could CEO Walk Free?

Author

Tim Alper

Author

Tim Alper

About Author

Tim Alper is a British journalist and features writer who has worked at Cryptonews.com since 2018. He has written for media outlets such as the BBC, the Guardian, and Chosun Ilbo. He has also worked...

Author Profile

Share

Copied

Last updated:

June 26, 2023 06:55 EDT

Why Trust Cryptonews

Cryptonews has covered the cryptocurrency industry topics since 2017, aiming to provide informative insights to our readers. Our journalists and analysts have extensive experience in market analysis and blockchain technologies. We strive to maintain high editorial standards, focusing on factual accuracy and balanced reporting across all areas - from cryptocurrencies and blockchain projects to industry events, products, and technological developments. Our ongoing presence in the industry reflects our commitment to delivering relevant information in the evolving world of digital assets. Read more about Cryptonews

Ad Disclosure

We believe in full transparency with our readers. Some of our content includes affiliate links, and we may earn a commission through these partnerships.

The legal team of the Terraform Labs Co-founder and CEO Do Kwon has hit out at the United States Securities and Exchange Commission (SEC) – claiming Terra coins are not securities.

The lawyers claimed that the SEC charges against Terraform, Kwon, and other executives are baseless, and therefore filed a motion for the charges to be dismissed.

Per the South Korean media outlet EDaily and Bloomberg, Kwon’s lawyers claim that Terra stablecoins are “currencies.”

This fact, they say, means the SEC has no jurisdiction over Terraform.

The SEC has accused Kwon and others of knowingly trading unregistered securities.

South Korean prosecutors are also hopeful of bringing Kwon to trial on similar charges.

Legal experts in the country believe this will be hard, however.

South Korean law does not currently classify any cryptoassets as securities.

Kwon’s lawyers stated that the SEC was powerless to “use federal securities law to assert jurisdiction over the digital assets in this case.”

And the lawyers said that they had asked an American court to dismiss the lawsuit, claiming that the SEC’s was making use of “outdated regulations.”

This is a reference to much-maligned American securities laws, which date back to the early 1930s.

Many crypto advocates in the United States have previously called for crypto to be excluded from SEC jurisdiction.

But of late, the SEC has pushed back, with its Chairman indicating that many popular tokens may indeed be securities.

Could Do Kwon’s Legal Team Derail SEC’s Case?

Kwon’s lawyers complained that the SEC’s classification of cryptoassets as securities is unclear.

The lawyers said:

“The SEC’s improper assertion of power […] by trying to shoehorn all cryptocurrencies into its definition of a ‘security’ fails.”

They further added:

“The SEC’s attempt to regulate cryptocurrencies using outdated laws is inappropriate.”

Earlier this month, prosecutors in South Korea moved to freeze more of Kwon’s crypto and fiat holdings.

But the legal situation for Kwon is far from clear.

He is currently in Montenegro, where he was last week charged with forgery-related offenses by local authorities.

Local media outlets say that Kwon will appear in court on May 11.

Kwon is also wanted in Singapore, where Terraform was established in 2018.

Last week, media outlets discovered that Kwon had paid Kim & Chang, South Korea’s biggest law firm, some $7 million just before the collapse of Terra coins in May last year.

Kwon also shuttered his South Korean businesses and left the nation prior to the collapse.