Breaking: Terra And Do Kwon Cite XRP Ruling As Precedent To Dismiss US SEC Lawsuit

Terraform Labs (TFL) and former CEO Do Kwon seek to dismiss the lawsuit filed by the US Securities and Exchange Commission (SEC) using Judge Torres’ ruling in the XRP lawsuit. Terra and Do Kwon earlier filed documents in support of the motion to dismiss the lawsuit claiming that the US SEC has no jurisdiction as well as LUNC and UST (now USTC) are not securities under the “investment contract” rule.

Also Read: Ripple Community Mocks Republican For Calling XRP A Security; Analyst Predicts Re-Entry Level

Terra Do Kwon Uses “Torres Doctrine” To Dismiss Lawsuit by SEC

Terraform Labs (TFL) and co-founder Do Kwon’s lawyers filed a supplemental authority in support of the motion to dismiss the lawsuit by the US Securities and Exchange Commission (SEC). Judge Jed Rakoff granted both defendants and the plaintiff to file a notice of supplemental authority regarding the dismissal of the lawsuit.

Lawyers from top law firm Dentons, representing Terraform Labs and co-founder Do Kwon, claimed Judge Analisa Torres’ landmark decision in US SEC v. Ripple Labs directly affects the defendants’ motion to dismiss the lawsuit. SEC argues that UST, LUNA, wLUNA, MIR, or mAssets are securities. However, the Ripple case confirms SEC’s legal insufficiency to prove its claim that cryptocurrencies, except Bitcoin are securities. Also, programmatic sales of digital assets are not securities, but institutional sales are securities in terms of investment contracts.

It further asserts that SEC didn’t allege UST sold to anyone, directly or on a secondary market. In fact, the SEC alleged that Terra sold LUNA and MIR on secondary markets, which are not investment contracts as per the XRP ruling.

Moreover, institutional sales of LUNA and MIR were not for resale and were exempted from registration. Moreover, a South Korean court has ruled that LUNA is not a security, which further strengthens Terraform Labs’ case.

“The LUNA and MIR sales were nothing like the institutional sales in Ripple: The LUNA and MIR sales were smaller, and the Terra ecosystem messaging was about participation by ecosystem participants and not just bringing value to one ecosystem.”

Terraform Labs requires the dismissal of the US Securities and Exchange Commission’s fraud claims as well as its registration claims.

Terra (LUNA) price currently trades at $0.65, up 10% in a week. Meanwhile, Terra Classic (LUNC) and USTC are trading at $0.000087 and $0.016, up 4% and 37% in a week, respectively.

Also Read: Terra Luna Classic Core Developer L1TF Members Resigned, Community Reacts