SEC opposes Dentons’ motion to dismiss Terraform and Do Kwon’s lawsuit.

Lawyers representing the United States Securities and Exchange Commission (SEC) argued that the additional documents submitted by Dentons, the law firm representing Terraform Labs and Do Kwon, in support of their motion to dismiss the lawsuit lack sufficient support for dismissing the case.

The SEC’s lawyers assert that the Binance.US transcript and internal SEC emails presented by the defense are not relevant to the current case. They argue that the Howey test clearly defines the parameters of an “investment contract” and contend that TerraUSD (UST) should be classified as a security.

Dentons submitted supplementary documents during a court hearing on June 15 to bolster their motion to dismiss the lawsuit filed by the SEC. The focus of the hearing was to determine if the digital assets developed by Terraform Labs should be classified as securities under the criteria of an “investment contract.”

Dentons argues that the algorithmic stablecoin, UST, is not classified as a security and emphasizes its practical purpose rather than an investment contract. In support of their motion to dismiss the lawsuit, they submitted supplementary documents, which include the U.S. House Financial Services Committee hearing on digital asset regulation and stablecoin issuance, the SEC’s request for a restraining order against Binance.US, and the Hinman emails from the SEC vs. Ripple lawsuit.

Related: Do Kwon could serve prison in both US and South Korea, prosecutor says

The defense lawyers highlighted a “regulatory gap” regarding the classification of crypto assets as securities, particularly as the U.S. Congress engages in discussions about regulatory frameworks for digital assets and stablecoin issuance. Additionally, they argued that the SEC is exceeding the scope of securities laws and relying on internal emails related to “investment contracts” to determine the security status.

Judge Jed Rakoff, who is presiding over the case, announced that a decision on the motion to dismiss the case will be handed down by July 14.

Dentons previously represented Kwon in challenging the U.S. SEC’s subpoena in its investigation of the Mirror Protocol in 2021 and a class-action lawsuit in the Singapore High Court in 2022. The law firm also represents Terraform Labs in other cases.

Meanwhile, the Basic Court in Podgorica, Montenegro, approved bail for Kwon and former Terra chief technology officer Han Chang-joon. Most recently, Kwon has been taken into extradition custody in Montenegro while the court decides on South Korea’s extradition request for the Terra founder.

Magazine: Do Kwon kicked in the assets

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