The SEC has asked for summary judgment from a federal judge in its case against Do Kwon and Terraform Labs, in a move aimed at avoiding a full trial. The SEC says there is “no genuine dispute as to any material fact” in this case, asserting that Kwon and Terraform sold the securities.
The SEC filing states that there is no dispute over the fact that the buyers invested money, whether in fiat currencies or crypto assets. This assertion is consistent with the regulator’s argument that Kwon and Terraform Labs offered securities. The case centers on whether the assets sold meet the criteria of an investment contract under the Howey test, a legal assessment used to determine whether a transaction qualifies as an investment contract and can be considered a security under US federal law.
The SEC argues that pooling funds in a joint venture with the expectation of profits derived primarily from the efforts of the promoters satisfies the Howey test and justifies a ruling in favor of the SEC.
The filing asserts that Terraform and Kwon engaged in fraudulent conduct and made misleading statements. They allege that they deceived investors about the stability of UST, attributed price stability to their algorithm while secretly arranging third-party interventions, and omitted important information. Terraform suffered a catastrophic collapse in May of the previous year, resulting in significant losses for investors.
In response to the SEC’s motion, Do Kwon’s defense team filed a similar document, asserting that the SEC had failed to prove that they were offering securities. Recently, Terraform co-founder Daniel Chen, who is on trial in South Korea, attributed Terraform Labs’ downfall to Kwon’s mismanagement. Sheen claimed that he distanced himself from the company and its activities two years before its collapse.
Kwon and Han arrested in Montenegro
Finance Magnates reported that a Montenegrin court sentenced Kwon to four months in prison for possessing false passports and travel documents. Han Zhongjun, the former CFO of a Singapore-based blockchain company, also faced the same charges and received a similar sentence.
Kwon and Han were arrested in March in Montenegro while trying to travel to Dubai on a private plane. The court revealed that fake Costa Rican and Belgian passports, along with fake ID cards, were confiscated from the executives.
This ruling comes several weeks after the court set bail at 400,000 euros for each of the perpetrators, Kwon and Han. However, the High Court subsequently revoked the bail granted in May, following an appeal by the public prosecutor. The appeal was brought on the basis that the executives’ property had not been adequately valued.
According to Bloomberg, the time Kwon and Han spent in detention will be taken into account in the length of their sentences. In addition, the court allowed them to appeal the ruling to a higher court.
Kwon told the court that he obtained the fake travel documents from an agency in Singapore, recommended by a friend of his. He also confirmed that he was not aware of the forgery of the documents. The CEO of Terraform Labs denied any knowledge of the fraudulent nature of the documents.
The SEC has asked for summary judgment from a federal judge in its case against Do Kwon and Terraform Labs, in a move aimed at avoiding a full trial. The SEC says there is “no genuine dispute as to any material fact” in this case, asserting that Kwon and Terraform sold the securities.
The SEC filing states that there is no dispute over the fact that the buyers invested money, whether in fiat currencies or crypto assets. This assertion is consistent with the regulator’s argument that Kwon and Terraform Labs offered the securities. The case centers on whether the assets sold meet the criteria of an investment contract under the Howey test, a legal assessment used to determine whether a transaction qualifies as an investment contract and can be considered a security under US federal law.
The SEC asserts that pooling funds in a joint venture with the expectation of profits derived primarily from the efforts of the promoters satisfies the Howey test and justifies a ruling in favor of the SEC.
The filing asserts that Terraform and Kwon engaged in fraudulent conduct and made misleading statements. They allege that they deceived investors about the stability of UST, attributed price stability to their algorithm while secretly arranging third-party interventions, and omitted important information. Terraform suffered a catastrophic collapse in May of the previous year, resulting in significant losses for investors.
In response to the SEC’s motion, Do Kwon’s defense team filed a similar document, asserting that the SEC had failed to prove that they were offering securities. Recently, Terraform co-founder Daniel Chen, who is on trial in South Korea, attributed Terraform Labs’ downfall to Kwon’s mismanagement. Sheen claimed that he distanced himself from the company and its activities two years before its collapse.
Kwon and Han arrested in Montenegro
Finance Magnates reported that a Montenegrin court sentenced Kwon to four months in prison for possessing false passports and travel documents. Han Zhongjun, the former CFO of a Singapore-based blockchain company, also faced the same charges and received a similar sentence.
Kwon and Han were arrested in March in Montenegro while trying to travel to Dubai on a private plane. The court revealed that fake Costa Rican and Belgian passports, along with fake ID cards, were confiscated from the executives.
This ruling comes several weeks after the court set bail at 400,000 euros for each of the perpetrators, Kwon and Han. However, the High Court subsequently revoked the bail granted in May, following an appeal by the public prosecutor. The appeal was brought on the basis that the executives’ property had not been adequately valued.
According to Bloomberg, the time Kwon and Han spent in detention will be factored into their sentences. In addition, the court allowed them to appeal the ruling to a higher court.
Kwon told the court that he obtained the fake travel documents from an agency in Singapore, recommended by a friend of his. He also confirmed that he was not aware of the forgery of the documents. The CEO of Terraform Labs denied any knowledge of the fraudulent nature of the documents.