2023-07-22 15:36:00
Bloomberg News reported on the 21st (local time) that Kwon Do-hyeong, CEO of Terraform Labs, cited the ruling of the virtual currency ‘Ripple’ as the logic to dismiss the lawsuit filed by the US Securities and Exchange Commission (SEC).
Bloomberg reported that Terraform Labs and Kwon’s lawyers submitted documents citing the Ripple ruling earlier this week.
Reportedly, lawyers argued that the Ripple ruling confirms that the SEC’s argument that certain tokens, including TerraUSD, are securities because of the way they are sold is legally insufficient.
Previously, the New York District Court ruled on the 13th of this month that “Ripple is a security when sold to institutional investors, but not to the general public” in a lawsuit filed by the SEC against Ripple’s issuer Ripple Labs in December 2020, saying that Ripple is ‘illegal securities’.
It is true that selling Ripple’s XRP tokens directly to institutional investors is against SEC regulations, but selling to individual investors through exchanges is not against the regulations, and it was understood as a victory for the virtual currency industry.
Previously, in February, the SEC filed a lawsuit against Terraform Labs and CEO Kwon for committing fraud of at least 40 billion dollars (approximately 52 trillion won) by providing and selling bearer securities.
Regarding Kwon’s citation of the Ripple ruling, the SEC pointed out that the Ripple ruling “creates an artificial gap between the expectations of institutional and individual investors.”
The SEC also indicated that it intends to appeal, saying that the Ripple ruling “inappropriately modified the ‘Howey Test’ to determine whether an asset is a security,” Bloomberg reported.
(Photo = Courtesy of Bijeti, a daily newspaper in Montenegro, Yonhap News)
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