United States of America: Issued ruling on motion by Terraform Labs and CEO Do Hyeong Kwon to dismiss complaint filed by SEC for alleged violation of Securities Act

On 31 July 2023, the US District Court for the Southern District of New York issued its opinion and order regarding the motion filed by Terraform Labs and CEO Do Hyeong Kwon to dismiss the complaint filed on 16 February 2023 by the Securities and Exchange Commission (SEC) against the defendants for alleged violation of the Securities Act. The SEC claimed that Terraform Labs and its CEO had conducted a multibillion-dollar fraud involving cryptocurrencies, using false statements to deceive US investors and selling security assets without registering the offers and sales with the SEC. The Court found that the defendants used false and materially misleading statements to prompt US investors to purchase the defendants’ cryptocurrencies. The Court also found that the cryptocurrencies were unregistered investment-contract securities, enabling investors to profit from their supposed investment activities. Consequently, the Court denied the motion of the defendants to dismiss the SEC's complaint.