Feb 18, 2023
SEC Accused of Wildly Charging Terraform Labs Founder
The Securities and Exchange Commission (SEC) recently filed charges against Do Kwon and Terraform Labs, leading to mixed reactions from the crypto community. The SEC alleged that the firm had been selling a suite of crypto asset securities.
In response to the charges, web3 lawyer Mike Selig took to Twitter to express his thoughts. He argued that the SEC had classified TerraUSD Classic (USTC) as a security because it could be exchanged for Luna Classic (LUNC), another security according to the SEC. Selig said that this interpretation would mean that “nearly anything can be a security.”
Mike Wawszczak, the general counsel for Alliance DAO, also commented on the SEC’s actions. He suggested that SEC Chairperson Gary Gensler may be aiming 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 questioned whether there is another non-security currency that does not behave in the same manner and described the SEC’s actions as “wild.”
Other members of the crypto community also weighed in on the issue. Dylan Daniel noted that if the SEC were to classify everything as a security, it would need to expand and scale itself. He hoped that Gensler had a plan for such an eventuality.
The debate was reignited on Feb. 13 when the SEC decided to go after Paxos, claiming that the Binance USD (BUSD) stablecoin was a security. Community members argued that users of the stablecoin do not purchase it and expect its price to go up.
The SEC’s decision to target Terraform Labs and Do Kwon has sparked a discussion on the implications of the case and how it could affect the crypto space in the future. With the rise of NFTs and the growing popularity of crypto, it is important to understand the regulatory environment and ensure that companies are compliant with the laws in place.
NFTs have become a popular way to promote brands and products. Companies are increasingly turning to NFT marketing agencies to help them create and promote their NFTs. These agencies can help companies create effective strategies for selling NFTs, as well as use Twitter and other social media platforms to promote their NFTs.
Web3 agencies are also becoming more popular, as they specialize in providing services related to the web3 space. They can help companies navigate the legal complexities of the crypto space and ensure that they are compliant with all relevant regulations.
The SEC’s decision to go after Terraform Labs and Do Kwon has highlighted the need for companies to be aware of the legal requirements when it comes to crypto assets. With the rise of NFTs and the growing popularity of crypto, it is important to understand the regulatory environment and ensure that companies are compliant with the laws in place. Companies should consider working with web3 agencies and NFT marketing agencies to ensure that they are following the right protocols and staying on the right side of the law.
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