Feb 18, 2023

SEC Accused of Overreaching in Terraform Labs Case

The United States Securities and Exchange Commission (SEC) is making its presence known in the web3 space, recently charging Do Kwon and his company, Terraform Labs, for allegedly selling crypto asset securities. This has caused a stir in the crypto community, as lawyers and other members weigh in on the SEC’s actions.

Mike Selig, a web3 lawyer, posted his thoughts on the matter on Twitter, pointing out that the SEC has characterized TerraUSD Classic (USTC) as a security because it can be exchanged for Luna Classic (LUNC), which is also considered a security by the SEC. Selig argued that this theory implies that “nearly anything can be a security.”

Mike Wawszczak, the general counsel for Alliance DAO, also commented on the situation. He suggested that SEC Chairperson Gary Gensler may be looking for “complete discretion” in applying securities laws to any transactions.

Justin Browder, a partner at the law firm Willkie Farr & Gallagher, compared the SEC’s description of USTC’s use to generate returns on another protocol to “depositing fiat in a bank.” He expressed his confusion and described the SEC’s actions as “wild.”

The SEC was met with similar confusion when it decided to go after Paxos, claiming that the Binance USD (BUSD) stablecoin is a security. Many members of the community argued that users of the stablecoin do not purchase it and expect its price to go up.

The SEC’s actions have caused some to question the implications of the organization’s decisions. Dylan Daniel, a Web3 community member, believes that if everything becomes a security, the SEC will have to expand and scale itself. He hopes that Gensler has a solid plan in place.

The SEC’s decisions have caused many to think about the implications of their actions. As the web3 space continues to grow, it is becoming increasingly important for crypto companies to understand the legal implications of their actions.

NFTs, a type of crypto asset, have become increasingly popular in recent years, and the SEC’s decisions could have a major impact on the way they are promoted and sold. Companies that are looking to sell NFTs should consider hiring a specialized NFT marketing agency, who can help them navigate the legal landscape and ensure that their marketing efforts are compliant with the SEC’s regulations.

Twitter is an effective platform for NFT promotion, and NFT marketing agencies can help companies create effective campaigns on the platform. They can help companies create eye-catching visuals and craft engaging copy that will grab the attention of potential buyers.

Overall, the SEC’s decisions have caused a stir among crypto companies and the web3 community. It is important for companies to understand the legal implications of their actions and to ensure that they are compliant with the SEC’s regulations. NFT marketing agencies can help companies navigate the legal landscape and create effective marketing campaigns on Twitter.

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