Terraform and Do Kwon’s legal representatives have submitted additional documents in their bid to dismiss the complaint against their clients. However, the United States Securities and Exchange Commission (SEC) attorneys argued that these documents were insufficient to justify the dismissal of the case.
On June 15, 2023, the attorneys filed additional documentation to strengthen their motion to dismiss the complaint filed by the U.S. SEC. The submitted documents included the U.S. SEC’s request for a restraining order against Binance.US, the Hinman emails from the SEC v. Ripple lawsuit, and the U.S. House Financial Services Committee hearing on digital asset regulation and stablecoin issuance. These documents were submitted to substantiate their argument that the algorithmic stablecoin UST (now USTC) should not be considered a security. They emphasized its practical utility rather than its function as an investment contract.
Terraform and Do Kwon’s legal team highlighted the existence of a “regulatory gap” concerning the classification of crypto assets as securities. They further argued that the SEC’s reliance on internal communications related to “investment contracts” to determine the security status goes beyond the boundaries established by securities laws.
The U.S. SEC’s legal representatives asserted that including the Binance.US transcript and internal SEC correspondence by the defence holds no relevance to the current legal dispute. They maintain that the Howey Test clearly outlines the criteria for an “investment contract,” which categorizes UST as a security.
Judge Jed Rakoff, who presides over the case, announced that a ruling on the motion to dismiss the lawsuit would be delivered by July 14, 2023.
Meanwhile, in a separate development, the Montenegro High Court granted bail to Do Kwon and former CTO Han Chang-joon. However, Do Kwon remains in custody in Montenegro, awaiting the court’s evaluation of South Korea’s request for his extradition. The court will review the extradition request before making a decision on the matter.
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