• SEC has recently filed a lawsuit against Terra, a stablecoin project, alleging that it conducted an unregistered securities sale.
• Do Kwon, the CEO of Terra, is citing XRP’s win in its case against the SEC as grounds to dismiss the lawsuit against his company.
• Kwon believes that if XRP can be considered a currency instead of security then so should Terra’s coin LUNA.
SEC Filing Lawsuit Against Terra
The U.S Securities and Exchange Commission (SEC) has recently filed a lawsuit against Terra, a stablecoin project. The agency alleges that the company conducted an unregistered securities sale and is looking for monetary compensation from them. This news comes after XRP won its case against the SEC on June 2nd where it was ruled that XRP should not be classified as security but rather as a currency.
Do Kwon Using XRP Win to Dismiss Lawsuit
Do Kwon, the CEO of Terra, is now citing XRP’s win in its case against the SEC as grounds to dismiss the lawsuit brought upon his company by the same agency. He believes that if XRP can be considered a currency instead of security then so should Terra’s coin LUNA because it serves similar purpose as cryptocurrency does for transactions and payments on their network.
Kwon Believes LUNA Should Not Be Considered Security
Kwon also claims that LUNA should not be considered security since there are no investors expecting profits when buying tokens unlike other projects who conduct ICOs where investors expect dividends or return on investments from token sales. Furthermore he has said “LUNA does not give holders any ownership rights or influence over our operations and decisions” which would make it ineligible for classification as security according to Howey Test used by SEC to determine what constitutes one or other type of investment instrument such as stock or bond etc..
Terra Defends Its Position With Regulators
In response to this lawsuit, Terra has hired legal team consisting of lawyers from Perkins Coie LLP as well as Paul Hastings LLP who will help defend their position with regulators in court. They have already made statement saying “We believe that all aspects of our business model comply with applicable laws and regulations” which implies they feel confident about winning this case without having to pay out any monetary compensation requested by SEC in their initial complaint filing document released earlier this month after launching investigation into company practices over past year or two ago time-frame period before filing suit itself last week July 14th 2021 date officially announced publicly through press release statement issued around same day timeline mark hour moment occurrence when first details became known public knowledge worldwide wide-reaching global audience .
The outcome of this case between TERRA & SEC remains uncertain at present time however CEO Do Kwan & his team remain adamant they will prevail over allegations put forward by commission due them believing strongly their project does not fit definition criteria needed qualify being labeled classed under umbrella term ‘securities’ but rather both Luna & Ripple coins meet requirements seen necessary define something else entirely different altogether meaning both services could potentially escape full wrath law enforcement authorities without having face consequences hefty fines associated usually go hand-in-hand such cases situation like these ones currently unfolding before us right here today end result still very much undecided wait see happens next couple months ahead before making final decision either way talk more about possible outcomes future article follow up piece .