A statement from Chris Amani, CEO of Terraform Labs, suggests that the company's bankruptcy will serve as a catalyst for challenging actions taken by the U.S. Securities and Exchange Commission (#SEC).
Amani's statement, included in a document filed in Delaware state court on January 30, 2024, highlights the key role Terraform Labs' Chapter 11 bankruptcy will play in the appeal process.
According to the document, to initiate an appeal of the SEC's decision, a company must post a bond equal to 110% of the total judgment. However, Chapter 11 bankruptcy protection allows a company to file a lawsuit without having to post a bond.
"A successful appeal will result in the elimination of the largest lawsuit, which will benefit not only the debtor and its creditors, but also society as a whole"stated Amani, CEO of Terraform Labs.
The company intends to argue that the SEC lacks the necessary jurisdiction to bring charges against Terraform Labs or its founder Do Kwon. Amani argues that the crypto assets held by Terraform Labs are not classified as securities, which puts the case beyond the SEC's jurisdiction.
In addition, the CEO said that Terraform Labs owns about $28 million worth of bitcoins, $7 million worth of other cryptocurrencies, and about $87 million worth of Luna tokens.
It's worth noting that in February 2023, the SEC accused Terraform Labs and its co-founder Do Kwon of engaging in a "multi-billion dollar securities #fraud."
In December, a judge ruled in favor of the regulator, confirming that UST, #LUNA, wLUNA and MIR assets are indeed investment contracts. Accordingly, the company filed for bankruptcy on January 21, 2024.
As previously reported, the hearing was postponed by the regulator pending the extradition of #Do Kwon, who is currently serving time in #Montenegro on forgery charges.
