A federal judge sided with the U.S. Securities and Exchange Commission in a fraud case against failed blockchain company Terraform Labs Pte. Ltd. and its Chief Executive Do Kwon, ruling that two crypto assets offered by the company – Luna and Mir – are unregistered securities.
U.S. District Judge Jed Rakoff ruled in favor of the regulator in summary judgment on Thursday, agreeing that Terraform is liable for selling unregistered securities. The decision will shape the civil fraud trial, which is set to be heard before a jury in a Manhattan federal court beginning Jan. 29.
Terraform caught the attention of regulators when its stablecoin ecosystem collapsed in May 2022 causing the crypto markets to crash creating what was dubbed “crypto winter.” Terraform offers a pair of connected currencies called TerraUSD, or UST, and Luna.
UST is a “stablecoin,” or a token that maintains one-to-one parity with another currency,…
