Because there is “no genuine dispute as to any material fact” in its lawsuit against Do Kwon and Terraform Labs, the Securities and Exchange Commission (SEC) has asked a federal judge for a summary judgment, sparing everyone the spectacle of a full trial.
“There is no dispute that purchasers made an investment of money, either through fiat currency or crypto assets,” the SEC noted in its complaint, which reiterated the regulator’s contention that Kwon and Terraform offered securities.
The request follows a move by Kwon’s defense team to do the same.
According to the complaint, money being pooled in a single business with the expectation of gains primarily from the promoters’ efforts fulfills the Howey test and merits judgment in favor of the SEC. The Howey test is a legal test used to assess whether a transaction qualifies as an investment contract and can be classified as a security under federal law in the United States.
The SEC reiterated in the filing that Terraform and Kwon committed fraud by misleading investors about the stability of UST, falsely crediting their algorithm for its price stabilization while secretly arranging third-party intervention, making their claims about the algorithm’s efficiency misleading, and materially omitting crucial information. Terra went bankrupt in May of last year, wiping off billions of dollars in investor money.
All of this comes only days after Kwon’s defense team submitted a similar brief asking the court to agree with them since, in their perspective, the SEC has not proven they were peddling securities.
Kwon is still in Montenegro, where he is serving a term for document forgery after being captured with bogus passports at an airport.
Terraform co-founder Daniel Shin, who is currently on trial in South Korea, recently ascribed Terraform Labs’ failure to former Kwon’s mismanagement, claiming his own departure from the company and its activities two years prior to its demise.