Terra’s Do Kwon Wants SEC Charges Dismissed, Court Filings Show
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Sandali Handagama is a CoinDesk reporter with a focus on crypto regulation and policy. She does not own any crypto.
Featured SpeakerChristy Goldsmith Romero
CommissionerU.S. Commodity Futures Trading Commission
Explore the policy fallout from the 2022 market crash, the advance of CBDCs and more.
Lawyers for Do Kwon, founder of collapsed crypto issuer Terraform Labs, have requested a U.S. court to dismiss charges brought against him by the Securities and Exchange Commission (SEC) partly for lack of jurisdiction, court filings from Friday show.
Kwon, who has been on the run from regulators since the collapse of his multi-billion dollar crypto enterprise in May 2022, was recently arrested in Montenegro for attempting to travel with falsified documents. Following his arrest, the SEC charged the South Korean national with securities fraud.
In the civil action brought against Kwon, the regulator failed to prove “personal jurisdiction” as products referenced by the SEC were “available to the world and not directed at U.S. persons,” a 47-page supporting document for a motion to dismiss the charges said. It also says that a digital asset involved in the case, the stablecoin UST, does not fall under the purview of the SEC as it is a currency and not a security.
“Congress has not granted the SEC the power to regulate the digital assets at issue here,” the document, filed with a New York court said.
The company also did not conduct any public offerings of securities that warranted an SEC registration, according to Kwon’s representatives. SEC Chief Gary Gensler has been facing mounting criticism over his handling of crypto regulation, mainly through enforcement action.
The SEC can oppose the motion to dismiss by May 12.
Edited by Parikshit Mishra.
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Sandali Handagama is a CoinDesk reporter with a focus on crypto regulation and policy. She does not own any crypto.
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Sandali Handagama is a CoinDesk reporter with a focus on crypto regulation and policy. She does not own any crypto.
