Terraform Labs Bankruptcy Aid SEC Appeal Amid Fraud Lawsuit

Terraform Labs asserts that its choice to declare bankruptcy is aimed at facilitating its ability to appeal the lawsuit brought against it by the United States SEC.

CEO Chris Amani stated that this step is crucial for their appeal against the lawsuit from the United States SEC. To appeal the SEC case, Terraform Labs normally must provide a “supersedeas bond,” which is 110% of the total judgment. 

Terraform Labs Bankruptcy Aid SEC Appeal Amid Fraud Lawsuit

Image Source: Jan. 30 court filing

However, by filing for Chapter 11 bankruptcy, the company hopes to take advantage of protections allowing them to pursue the appeal without the immediate requirement to pay the bond.

In the provided text, Amani claimed that in the upcoming appeal, the argument will be made that the SEC does not possess the requisite authority to levy charges against either the company or its co-founder, Do Kwon. 

Amani asserted that the digital assets held by Terraform Labs should not be categorized as securities, and he contended that the SEC does not have jurisdiction over the case.

Additionally, Amani mentioned that the treasury of Terraform Labs currently holds around $28 million in Bitcoin, $7 million in various other cryptocurrencies, and approximately $87 million in Luna (LUNA) tokens.

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2024-01-31 09:26