- A federal judge has denied Terraform Labs and Do Kwon’s motions to reconsider previous court decisions regarding expert witness opinions in their SEC lawsuit.
- The SEC uses the ruling in Terra’s case to bolster its arguments in ongoing lawsuits against Binance and Coinbase.
Judge Dismisses Terra’s Appeal for Reconsideration
In a decisive move, Judge Jed S. Rakoff of the U.S. federal court has denied several motions filed by Terraform Labs and its co-founder Do Kwon. These motions sought to challenge earlier court orders, particularly those relating to the opinions of expert witnesses in their ongoing legal battle with the U.S. Securities and Exchange Commission (SEC). The judge’s decision reaffirms the SEC’s stance, following a previous order that found Terra and Do Kwon in violation of the Securities Act.
The court filings, dated late January 11, indicated that Terra and Do Kwon had requested a re-evaluation of the court’s earlier decision. This decision had rejected the input of experts Raj Unny and Dr. Matthew Edman regarding discovery and summary judgment processes. However, the judge, upholding the SEC’s arguments, dismissed these reconsideration motions based on evidence from the Daubert Hearing, email exchanges, and interlocutory responses.
Ripple Effect of Terra Ruling on Binance and Coinbase
In a strategic move, the SEC is capitalizing on its partial victory in the Terra lawsuit to influence its legal proceedings against other major crypto entities like Binance and Coinbase. By filing a notice of supplemental authority, the SEC is urging courts in these cases to take into account the Terra lawsuit’s rulings.
The SEC’s argument hinges on the Terra case’s interpretation of “investment contract,” challenging attempts to redefine decades of established legal understanding. It asserts that an investment contract encompasses more than just a contract, transaction, or scheme, potentially setting a precedent that could impact how digital assets are regulated and litigated in the U.S.
The denial of Terra and Do Kwon’s motions for reconsideration marks a crucial development in the SEC’s rigorous stance on cryptocurrency regulation. As the legal landscape continues to evolve, the implications of this ruling could extend far beyond the Terra case, potentially influencing the outcomes of other high-profile lawsuits involving major players in the crypto world.