After a mixed decision in favor of Ripple in his lawsuit against the United States Securities and Exchange Commission (SEC), the US regulator filed new documents to Last moment in his lawsuit against Terraform Labs and its CEO, Do Kwon. The SEC alleges that the decision on Ripple was wrong and that could be appealed.
According to new documents filed in the case Terraform Labsthe SEC implies that a federal judge ruled that Ripple did not violate securities laws by offering your native token XRP to retail investors, but it did when it came to institutional investors.
The SEC responds to a filing by Terraform’s lawyers earlier this weekin which they stated that Ripple’s rulings they strengthen your defense and support your request to dismiss the lawsuit.
The center of the controversy is based on the howey testa legal test that determines whether a financial instrument constitutes an investment contract and, therefore, is subject to the regulation of the SEQ.
According to the documents presented, the SEC argues that much of the ruling in the Ripple case supports its claims and that Ripple’s practices conflict with the howey test. The SEC argues that those parts of Ripple’s ruling were incorrectly decided and that the court should not follow them.
The filings against Terra and Do Kwon indicate that the SEC believes the Ripple judge should throw out his recent rulings related to XRP retail sales. The SEC argues that the company creates an artificial distinction between the expectations of institutional investors sophisticated and retailers, which affects the Howey test.
Even if there were substantial differences, according to the SEC, the Ripple case benefits the position of the regulatory body. The SEC holds that the court should draw reasonable inferences in favor of the agency, including that the institutional buyers in this case, such as the trading firms that bought Ripple’s crypto assets without resale restrictions, they bought because they saw the assets as an investment opportunity in Terraform’s efforts.
Terraform Labs and its CEO Do Kwon have been legally fighting the SEC since earlier this year, after the company collapsed. The lawsuit is damning, after Terra’s UST stablecoin lost its valueaffecting a $40 billion platform with retail and institutional investors.
The SEC concludes by stating that the underlying logic of Ripple’s judgment is disconnected from the basic principles behind the Howey test and federal laws values in general.
Source: Ambito
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