Terraform Labs Faces SEC Setback: Judge Deems UST and LUNA Securities

The legal woes continue for Terraform Labs as they face a significant setback in their battle with the Securities and Exchange Commission (SEC). In a groundbreaking legal development, a U.S. court has ruled that LUNA and UST tokens offered by TerraForm Labs are considered securities. This ruling marks a pivotal moment in the ongoing regulatory scrutiny of the cryptocurrency industry.

The case stems from the collapse of the TerraUSD (UST) stablecoin and its sister token, LUNA, which wiped out billions of dollars in investor value and triggered widespread market turmoil. A New York judge sided with the Securities and Exchange Commission in its claim that Terraform Labs, creator of the disastrous Terra and Luna cryptocurrencies, and its founder Do Kwon violated securities laws.

Details of the SEC Victory

The judge's decision focuses on whether Terraform Labs' activities constituted the offering and sale of unregistered securities. In the court document dated Decem, Judge Rakoff granted a summary judgment favoring the SEC's claim that Terraform Labs and Kwon offered and sold unregistered tokens. This ruling will likely have significant implications for other cryptocurrency companies and their token offerings.

Learn about the implications of this ruling and what it means for the future of Terraform Labs, the ongoing SEC lawsuit, and the wider cryptocurrency market. We will continue to update this story as it develops.