US District Court Rules in Favor of SEC in Case Against Terraform Labs

A United States District Court has ruled in favor of the United States Securities Commission (SEC) using expert assistance in its case against Terraform Labs and its former CEO Do Kwon. The court granted summary judgment for defendants on claims involving offering and effecting transactions in security-based swaps. Terraform Labs’ request to exclude the testimony of the SEC’s expert witnesses was denied. The ruling heavily relied on the Howey test to determine the nature of the investments. The court noted a previous statement from Kwon, indicating that LUNA investors were effectively putting their money in a common enterprise with expectations of profits from the efforts of Terraform Labs and Kwon. Similarly, the MIR token was judged under the same criteria, with the court concluding that it indeed satisfies the Howey test due to the expectation of profits driven by Terraform’s developmental efforts. (Source: Coingape)