Do Kwon and Terraform Labs ask judge to toss SEC’s lawsuit
Terraform Labs co-founder Do Kwon has requested a United States district judge to reject the securities and fraud suit from the federal securities regulator, claiming it has failed to prove they did anything wrong.
In an Oct. 27 filing to a New York District Court, lawyers for Kwon and Terraform argued its cryptocurrencies Terra Luna Classic (LUNC), TerraClassicUSD (USTC), Mirror Protocol (MIR) and its Mirrored Assets (mAssets) that reflect stocks on-chain are not securities as the Securities and Exchange Commission alleged.
“After two years of investigation, the completion of a discovery period that resulted in the taking of more than 20 depositions, and the exchange of over two million pages of documents and data, the SEC is evidentiarily no closer to proving that the Defendants did anything wrong,” the lawyers wrote.
They added the “evidence does not exist to support many of the SEC’s claims” and asserted the regulator “knew some of its allegations were false” — in particular, an allegation that Kwon and Terraform secretly moved millions into Swiss bank accounts for their own gain.
In its suit against Kwon and Terraform filed in February, the SEC claimed the pair sent 10,000 Bitcoin (BTC) to a Swiss financial institution and withdrew $100 million. It also claimed they committed fraud by “repeating false and misleading statements.”
“The SEC knew this allegation was false when it filed this case,” Kwon’s lawyers wrote. ”This is made even worse by the undisputed fact that TFL had no customers, and thus no customer funds.”
The $40 billion Terra ecosystem collapsed in May 2022 after its USTC algorithmic stablecoin lost its U.S. dollar peg.
Related: Terraform co-founder Shin blames protocol for collapse during trial in S. Korea
Kwon and Terraform also moved to exclude the opinion of the SEC’s experts including a report from Rutgers University economics professor Bruce Mizrach which they called “junk science.”
Judge Jed Rakoff, who oversees the case, denied Terraform’s earlier attempt to toss the lawsuit.
Kwon is currently detained in Montenegro and has previously asked the court to reject the SEC’s motion to extradite and interview him in the U.S.
Magazine: How to protect your crypto in a volatile market — Bitcoin OGs and experts weigh in
Governments around the world are exploring and launching stablecoins to remain competitive against dollar-pegged digital fiat tokens.
Politics
Sir Ed Davey brands Elon Musk a criminal and calls for his arrest for ‘allowing online harm to children’
Sir Ed Davey has branded Elon Musk a criminal and called for him to be prosecuted for “allowing online harm to children” on his social media platform X.
The Lib Dem leader told Sky News’ Sunday Morning with Trevor Phillips the billionaire owner of X, formerly Twitter, is “inciting violence” and his social media platform is actively failing to protect children.
Sir Ed, speaking from the Lib Dem conference in Bournemouth, said Mr Musk could be prosecuted under the Online Safety Act, under which social media companies have a legal duty to protect children from harmful content and their directors are liable for criminal prosecution for breaching it.
Elon Musk. Pic: Reuters
Asked if he is calling Mr Musk a criminal, Sir Ed did not miss a beat as he said: “Yes.
“Not just because of the awful things he’s done in inciting violence, and, for example, he says a civil war in our country is inevitable, that our democratically elected government should be overthrown.
“They were bad enough. But on his platform, they’re examples of adverse, pushing people on self-harm, on grooming, even selling videos showing paedophile acts, of child sex abuse acts and I think he should be held to account for them, him personally and his business.
“Ofcom now has the powers under the Online Safety Act.”
He said if Mr Musk comes to the UK, he should be arrested.
Read more:
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Sir Ed Davey enters conference with marching band
Mr Musk was accused of inciting violence during a march organised by Tommy Robinson in London last week.
He told the protest via video link: “This is a message to the reasonable centre, the people who ordinarily wouldn’t get involved in politics, who just want to live their lives. They don’t want that, they’re quiet, they just go about their business.
“My message is to them: if this continues, that violence is going to come to you, you will have no choice. You’re in a fundamental situation here.
“Whether you choose violence or not, violence is coming to you. You either fight back or you die, that’s the truth, I think.”
Sir Ed Davey said Elon Musk should be arrested
Sir Ed said it is “shocking” that Mr Musk removed some of X’s child safety teams when he took over Twitter in 2022 and accused him of just being “interested in his bank account”.
“I’m interested in the safety of our children, and it is quite wrong that his business puts on these adverts,” said the Lib Dem leader.
“It’s disgusting and I hope everybody will agree with me and the Liberal Democrats that we should take really strong action against him.”
After Mr Musk acquired Twitter, many of its child safety staff were laid off or resigned, and the platform’s trust and safety council was disbanded.
Child protection experts have accused Mr Musk of leading a “race to the bottom on safety”.
Elon Musk with Donald Trump in the Oval Office. Pic: AP
Ofcom, the UK’s independent media regulator, which has the power to prosecute directors of social media platforms under the Online Safety Act, has launched an investigation into X’s handling of child sexual abuse content.
This is not the first time Sir Ed has hit out at the world’s richest man, as he called for the US ambassador to be summoned in February “to ask why an incoming US official is suggesting the UK government should be overthrown”.
Mr Musk reacted by calling Sir Ed a “snivelling cretin”.
Sir Ed is expected to reiterate his call for Mr Musk’s arrest at his conference speech on Tuesday.
Pic: Reuters
He will accuse Mr Musk of being motivated by “his own ego, power and wealth, rather than the rights and freedoms of the British people”.
The Lib Dems will also table a parliamentary motion summoning Mr Musk to the House of Commons “to be reprimanded for his actions”.
Sky News has approached X and Elon Musk for comment, but as of publication has received no response.
X maintains it has “zero tolerance for child sexual abuse material” and claims tackling those who exploit children is a “top priority”.
The UK will formally recognise Palestine as a state, it is understood.
Sir Keir Starmer is expected to make the announcement today after he said in July that the government would make the move unless Israel met certain conditions.
The prime minister had called on Benjamin Netanyahu’s government to take substantive steps to end the “appalling situation in Gaza“, agree to a ceasefire, commit to a long-term sustainable peace, allow the UN to restart the supply of aid, and not annex the West Bank.
The Israeli foreign ministry furiously rejected his statement, with Mr Netanyahu claiming that “Starmer rewards Hamas‘s monstrous terrorism and punishes its victims”.
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Could recognition of Palestine change the West Bank?
Ilay David, brother of Hamas hostage Evyatar David, who was seen emaciated in a video last month, said giving recognition was “like saying to Hamas: ‘It is OK, you can keep starving the hostages, you can keep using them as human shields.’
“This kind of recognition gives Hamas power to be stubborn in negotiations. That is the last thing we need right now.”
There has been no ceasefire, and the situation in Gaza has deteriorated, with a declaration of a famine in Gaza City and the expansion of Israeli military operations.
Israel has launched a major ground offensive to seize all of Gaza City and destroy Hamas in an operation which has prompted widespread condemnation, with UK Foreign Secretary Yvette Cooper calling it “utterly reckless and appalling”.
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What changed in UK’s Gaza policy?
Earlier this month, a UN commission of inquiry concluded that Israel has committed genocide against Palestinians in Gaza. Israel said the claim was “distorted and false”.
The UK will join 147 of the 193 members of the UN who recognise Palestine ahead of the UN General Assembly in New York on Monday.
Other nations, including France, Australia and Canada, have said they plan to take the same step at the UN gathering as part of a broad international effort to put pressure on Israel.
And the Muslim Council of Britain welcomed the prime minister’s move, but urged that recognition must also come with “tangible action”.
During a joint news conference with the prime minister at Chequers on Thursday, Donald Trump said he disagreed with recognition, and US politicians have urged the UK and other allies to reverse their stance.
Sir Keir Starmer is expected to formally announce the move on Sunday. Pic: PA
Sky News understands that Israel is considering options in response to the UK’s decision, but the strength of that reaction is still under consideration.
Read more:
Palestinian minister says UK recognition of state would be ‘courageous step’
What does recognising a Palestinian state mean?
Gaza could be ‘real estate bonanza’, Israeli minister says
Family members of some of the 48 hostages still in captivity, after Hamas and other militant groups stormed into Israel on 7 October 2023, have written an open letter to Sir Keir, condemning the move.
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Israel ramps up attacks on Gaza City
“Hamas has already celebrated the UK’s decision as a victory and reneged on a ceasefire deal,” they said.
“We write to you with a simple plea – do not take this step until our loved ones are home and in our arms.”
Meanwhile shadow foreign secretary Dame Priti Patel accused the prime minister of “capitulating” to his backbenchers to shore up his leadership.
“With the terrorist organisation Hamas still holding hostages in barbaric conditions and glorifying acts of terror, Starmer is sending a dangerous message, where violence and extremism are tolerated and rewarded,” she said.
The UK government is understood to be looking at further sanctions on Hamas, and has demanded the group release all hostages, agree to an immediate ceasefire, accept it will have no role in governing Gaza, and commit to disarmament.
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