Do Kwon’s lawyers have questioned the U.S. SEC’s jurisdiction over crypto assets.
The lawyers have requested the court to dismiss the securities fraud allegations made by the regulator.
U.S. law enforcement has sought Kwon’s extradition from Montenegro.
The Terraform Labs co-founder was recently indicted for the forgery of legal documents.
Do Kwon is taking on the U.S. Securities and Exchange Commission by bringing the agency’s jurisdiction over crypto assets into question. Lawyers representing the disgraced Terraform Labs executive have claimed that the lawsuit filed by the securities regulator in the United States is unfounded due to the nature of the crypto assets in question.
Do Kwon’s Lawyers Request Judge To Dismiss SEC’s Lawsuit
According to a report by Bloomberg, Do Kwon’s defense team has argued that the crypto asset at the center of the SEC’s lawsuit, the TerraUSD stablecoin, is a currency and not a security. The lawyers cited U.S. law while pointing out that regulators are prohibited from “using federal securities law to assert jurisdiction over the digital assets in this case.”. To that end, the lawyers have requested a Manhattan judge to dismiss the lawsuit filed against the Terraform Labs co-founder by the securities regulator.
The SEC’s improper assertion of power here by trying to shoehorn all cryptocurrencies into its definition of a security fails.”
Court filing by Do Kwon’s lawyers.
The filing by Do Kwon’s lawyers highlighted the fact that the U.S. Congress, the executive branch, and the SEC have not been able to clarify as to what constitutes “security”. They argued that the securities fraud lawsuit filed by the securities regulator fails to take into account that TerraUSD’s status as a security hasn’t been proven yet.
U.S. law enforcement agencies have sought the extradition of Do Kwon from Montenegro, where he was arrested last month for trying to board an international flight using fake documents. Earlier this week Kwon was indicted by local prosecutors in the State of Podgorica for forging legal documents, including his passport. The Terra co-founder may be handed a sentence of up to five years.