Legal professionals for Do Kwon, founding father of collapsed crypto issuer Terraform Labs, have requested a U.S. court docket to dismiss prices introduced in opposition to him by the Securities and Alternate Fee partly due to the shortage of jurisdiction, court docket filings from Friday present.
Kwon, who has been on the run from regulators for the reason that collapse of his multibillion-dollar crypto enterprise in Could 2022, was arrested in Montenegro final month for making an attempt to journey with falsified paperwork. Following his arrest, the SEC charged the South Korean nationwide with securities fraud.
In its civil lawsuit in opposition to Kwon, the SEC did not show “private jurisdiction” as merchandise referenced by the regulator had been “out there to the world and never directed at U.S. individuals,” a 47-page supporting doc for a movement to dismiss the costs stated. It additionally says {that a} digital asset concerned within the case, the stablecoin UST, doesn’t fall beneath the purview of the SEC as a result of it’s a forex and never a safety.
“Congress has not granted the SEC the ability to manage the digital property at problem right here,” the doc filed with a U.S. district court docket in New York stated.
The corporate additionally didn’t conduct any public choices of securities that warranted an SEC registration, based on Kwon’s representatives. SEC Chairman Gary Gensler has been dealing with mounting criticism for regulating crypto by enforcement actions.
The SEC can oppose the movement to dismiss by Could 12.
Edited by Parikshit Mishra.