Feb 18, 2023
SEC Accuses Terraform Labs, Sparking Reactions from Crypto Lawyers
The United States Securities and Exchange Commission (SEC) has recently set its sights on Terraform Labs and its founder Do Kwon, accusing and charging them for allegedly selling a “suite of crypto asset securities.” This news has sparked many reactions from lawyers within the crypto and web3 space, questioning the manner in which the SEC is going after Terra and its founder.
Lawyer Mike Selig took to Twitter to express his thoughts on the issue. According to Selig, the SEC is characterizing the algorithmic stablecoin TerraUSD Classic (USTC) as a security because it could be exchanged for Terra (LUNA), now known as Luna Classic (LUNC), which is also a security according to the SEC. He believes that under this theory, “nearly anything can be a security.”
Mike Wawszczak, the general counsel for Alliance DAO, commented that SEC Chairperson Gary Gensler may be seeking “complete discretion” in applying securities laws to any transactions. Wawszczak noted that Gensler has requested $2.2 billion in FY 2023 for this job, which is quite a large sum compared to San Francisco’s budget of $13 billion last year.
Justin Browder, a partner at the law firm Willkie Farr & Gallagher, likened 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 such a manner, and described the SEC’s actions as “wild.”
Other members of the crypto community have also added to the conversation. Dylan Daniel believes that if everything becomes a security, the SEC will have to expand and scale itself. He hopes that Gensler has a solid plan.
Similar sentiments were expressed on Twitter when the SEC decided to go after Paxos, claiming that the Binance USD (BUSD) stablecoin is a security. Many argued that users of the stablecoin do not purchase it and expect its price to go up.
The implications of this case are far-reaching. As the SEC continues to crack down on NFTs and other crypto assets, it is clear that the agency is taking a zero-tolerance approach to crypto-related activities. This could have a significant impact on the entire crypto industry, including NFTs, and the way they are marketed and promoted.
It is not yet clear how the SEC’s actions will affect NFT marketing agencies, but it is likely that they will have to be more mindful of the regulations when promoting and selling NFTs. Twitter NFT marketing campaigns, in particular, will likely be affected, as the SEC is likely to take a closer look at those activities.
Overall, the SEC’s move is a reminder for the crypto community that they must remain vigilant and aware of their obligations under the law. It is also a reminder that the agency is serious about enforcing its regulations and that those who fail to comply could face serious consequences. As the crypto industry continues to grow and expand, it is essential that companies and individuals stay up to date with the latest regulations and ensure that they are compliant.
Disclaimer: All investment or financial opinions expressed by MoonLanding Media are not recommendations and are intended for entertainment purposes only. Do your own research prior to making any kind of investment. This article has been generated based on trending topics, has not been fact checked and may contain incorrect information. Please verify all information before relying on it.
