{"id":20125,"date":"2023-04-22T21:52:58","date_gmt":"2023-04-22T21:52:58","guid":{"rendered":"https:\/\/crowdfundjunction.com\/blog\/do-kwon-challenges-secs-jurisdiction-in-multibillion-dollar-crypto-securities-fraud-case-bitcoin-news\/"},"modified":"2023-04-22T21:52:58","modified_gmt":"2023-04-22T21:52:58","slug":"do-kwon-challenges-secs-jurisdiction-in-multibillion-dollar-crypto-securities-fraud-case-bitcoin-news","status":"publish","type":"post","link":"https:\/\/crowdfundjunction.com\/blog\/do-kwon-challenges-secs-jurisdiction-in-multibillion-dollar-crypto-securities-fraud-case-bitcoin-news\/","title":{"rendered":"Do Kwon Challenges SEC’s Jurisdiction in Multibillion-Dollar Crypto Securities Fraud Case \u2013 Bitcoin News"},"content":{"rendered":"

(Originally posted on : Bitcoin News )<\/b>
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Attorneys defending the co-founder of Terraform Labs, Do Hyeong Kwon, also known as Do Kwon, have presented their argument that says the U.S. Securities and Exchange Commission (SEC) has no jurisdiction in the matter. The legal team asserts that U.S. law precludes regulators \u201cfrom using federal securities law to assert jurisdiction over the digital assets in this case.\u201d<\/strong><\/p>\n

Terraform Labs Co-Founder\u2019s Legal Team Claims SEC Lacks Jurisdiction Over Digital Assets in Terra Case<\/h2>\n

As per Bloomberg<\/a>, Kwon\u2019s lawyers have filed a motion to dismiss the lawsuit, citing that the SEC\u2019s case relies on outdated regulations and that the agency\u2019s definition of digital assets as securities is far from clear<\/a>. In fact, Patrick McHenry (R-NC), the House Financial Services Committee chairman, recently expressed<\/a> that there is \u201ca great deal of uncertainty\u201d regarding the SEC\u2019s enforcement actions. Kwon\u2019s lawyers capitalize on this ambiguity to assert that the SEC\u2019s attempt to categorize all cryptocurrencies as securities falls short.<\/p>\n

Kwon\u2019s lawyers stated:<\/p>\n

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The SEC\u2019s improper assertion of power here by trying to shoehorn all cryptocurrencies into its definition of a \u2018security\u2019 fails.<\/p>\n<\/blockquote>\n

Kwon faces charges<\/a> by the SEC of leading \u201ca multibillion-dollar crypto-asset securities fraud\u201d filed in mid-February 2023. The SEC alleged that the stablecoin terrausd (UST) and Terra\u2019s token LUNA were \u201cunregistered securities\u201d and that Kwon had created a suite of mirrored assets that replicated the value of U.S. stocks, which were used on the now-defunct defi platform Mirror.<\/p>\n

This lawsuit is not the first time Kwon and the SEC have crossed paths. The SEC had previously served Kwon with a subpoena in 2021 over the Mirror protocol, and Kwon had sued the SEC<\/a> over its lack of jurisdiction. In November 2021, the SEC attempted to compel<\/a> Kwon with subpoenas, seeking documents from Terraform Labs. Six months later, the once-stablecoin UST depegged, leading to the colossal collapse<\/a> of the Terra blockchain ecosystem.<\/p>\n

Kwon currently is in custody in Montenegro after his arrest<\/a> on March 23 for possessing false identification. He is at risk of extradition by law enforcement officials from the U.S. and South Korea over the Terra ecosystem\u2019s collapse and transactions<\/a> involving its native assets, UST and LUNA. According to a recent report<\/a>, Kwon had paid $7 million to a top law firm in South Korea before the Terra ecosystem\u2019s collapse.<\/p>\n

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\nTags in this story
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Cryptocurrency<\/a>, decentralized finance<\/a>, Do Hyeong Kwon<\/a>, do kwon<\/a>, jurisdiction<\/a>, legal battle<\/a>, LUNA<\/a>, Mirror Protocol<\/a>, Regulation<\/a>, SEC<\/a>, SEC Case<\/a>, securities fraud<\/a>, terraform labs<\/a>, UST<\/a><\/div>\n<\/div>\n

What do you think will be the outcome of the legal battle between Do Kwon and the SEC? Share your thoughts about this subject in the comments section below. <\/strong><\/em><\/p>\n

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\nJamie Redman <\/h6>\n

\nJamie Redman is the News Lead at Bitcoin.com News and a financial tech journalist living in Florida. Redman has been an active member of the cryptocurrency community since 2011. He has a passion for Bitcoin, open-source code, and decentralized applications. Since September 2015, Redman has written more than 6,000 articles for Bitcoin.com News about the disruptive protocols emerging today.

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Image Credits<\/b>: Shutterstock, Pixabay, Wiki Commons<\/em><\/p>\n

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