The legal team of the Terraform Labs Co-founder and CEO Do Kwon has hit out at the United States Securities and Exchange Commission (SEC) – claiming Terra coins are not securities.
The lawyers claimed that the SEC charges against Terraform, Kwon, and other executives are baseless.
And they filed a motion for the SEC’s charges against Terraform and Kwon to be dismissed.
Per the South Korean media outlet EDaily and Bloomberg, Kwon’s lawyers claim that Terra stablecoins are “currencies.”
This fact, they say, means the SEC has no jurisdiction over Terraform.
The SEC has accused Kwon and others of knowingly trading unregistered securities.
South Korean prosecutors are also hopeful of bringing Kwon to trial on similar charges.
Legal experts in the country believe this will be hard, however.
South Korean law does not currently classify any cryptoassets as securities.
Kwon’s lawyers stated that the SEC was powerless to “use federal securities law to assert jurisdiction over the digital assets in this case.”
And the lawyers said that they had asked an American court to dismiss the lawsuit, claiming that the SEC’s was making use of “outdated regulations.”
This is a reference to much-maligned American securities laws, which date back to the early 1930s.
Many crypto advocates in the United States have previously called for crypto to be excluded from SEC jurisdiction.
But of late, the SEC has pushed back, with its Chairman indicating that many popular tokens may indeed be securities.
Could Do Kwon’s Legal Team Derail SEC’s Case?
Kwon’s lawyers complained that the SEC’s classification of cryptoassets as securities is unclear.
The lawyers said:
“The SEC’s improper assertion of power […] by trying to shoehorn all cryptocurrencies into its definition of a ‘security’ fails.”
They further added:
“The SEC’s attempt to regulate cryptocurrencies using outdated laws is inappropriate.”
Earlier this month, prosecutors in South Korea moved to freeze more of Kwon’s crypto and fiat holdings.
But the legal situation for Kwon is far from clear.
He is currently in Montenegro, where he was last week charged with forgery-related offenses by local authorities.
Local media outlets say that Kwon will appear in court on May 11.
Kwon is also wanted in Singapore, where Terraform was established in 2018.
Last week, media outlets discovered that Kwon had paid Kim & Chang, South Korea’s biggest law firm, some $7 million just before the collapse of Terra coins in May last year.
Kwon also shuttered his South Korean businesses and left the nation prior to the collapse.