The SEC seeks summary judgment in the case of Do Kwon and Terraform Labs

The United States Securities and Exchange Commission (SEC) rejected the jury's findings of fact regarding alleged violations by Terraform Labs and requested summary judgment on all claims.

An Oct. 27 court filing revealed the SEC's refusal to admit the jury's negligence to Do Kuo and his involvement in facilitating the fraud that ultimately led to Terra Ecosystem's collapse. The lawsuit, filed in the U.S. District Court for the Southern District of New York, reads:

“No reasonable jury could conclude that Kwon was not liable for violations of Section 10(b) of the Terraform Exchange Act and Rule 10b-5 pursuant to Section 20(a) of the Exchange Act.”

The “evidence” of violations provided by the SEC shows that Kwon was involved in misleading crypto investors by creating and marketing Terra and its underlying Terra (LUNA) tokens as securities.

That day, Kwon and Terraform Labs asked a judge to dismiss the SEC's lawsuit, arguing that TerraClassic (LUNC), TerraClassicUSD (USTC), Mirror Protocol (MIR) and its mirrored assets (mAssets) are not securities. .

However, the SEC maintains that Kwon and Terraform Labs offered and sold securities, sold LUNA and MIR in unregistered transactions, transactions involving mAssets, and engaged in fraud.

Related: Terraform co-founder Shin blames protocol for test failure in Korea

While a lawyer for Terra co-founder Daniel Shin blamed the destruction of Terra's ecosystem on “the illogical anchoring protocol and external attacks by Do-Hyung Kwon,” the company recently accused market maker Citadel Securities of being “coordinated.” A deliberate effort to debase the TerraUSD (UST) stablecoin in 2022.

In a statement to Cointelegraph, Citadel Securities said: “This absurd activity is based on false social media posts and ignores our earlier submissions that we have no role in this matter.”

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