Terra come under suspicion by SEC
2023.02.17 09:28
Terra come under suspicion by SEC
By Tiffany Smith
Budrigannews.com – The fact that the company and its founder, Do Kwon, are under scrutiny by the Securities and Exchange Commission (SEC) of the United States has prompted a variety of responses from lawyers in the crypto community.
The SEC filed charges against Kwon and Terraform Labs on February 16 for allegedly selling a “suite of crypto asset securities.” Community members are questioning the manner in which the SEC is pursuing Terra and its founder, even though they are not defending Kwon for his actions.
On Twitter, Web3 attorney Mike Selig shared his thoughts on the subject. Selig claims that the SEC considers the algorithmic stablecoin TerraUSD Classic (USTC) to be a security because it can be exchanged for Terra (LUNA), which is now Luna Classic (LUNC), which the SEC also considers to be a security. According to Selig’s explanation, “nearly anything can be a security” under this theory.
Alliance DAO’s general counsel, Mike Wawszczak, offered his thoughts as well. Wawszczak says that SEC Chairperson Gary Gensler might want “complete discretion” when it comes to how securities laws are applied to any transactions. He tweeted:
It’s hard to not conclude from the SEC v. TFL complaint that Chairman Gensler wants to apply securities laws to any transaction he wants.
for that job, he requested $2.2 billion in FY 2023.
Willkie Farr & Gallagher partner Justin Browder compared the SEC’s description of the use of USTC to generate returns on another protocol to “depositing fiat in a bank.” Additionally, the lawyer inquired as to whether there are any other currencies that are not securities and behave differently. Browder ended up calling the SEC’s actions “wild.”
In addition to the lawyers, other crypto community members contributed to the discussion. The SEC will need to expand and scale if everything becomes a security, according to Dylan Daniel. A member of the Web3 community believes that Gensler has a sound strategy.
When the SEC decided to pursue Paxos and claimed that the Binance USD (BUSD) stablecoin is a security, similar sentiments were expressed on Twitter on February 13. Many community members were perplexed and argued that stablecoin users do not purchase it and anticipate its price to rise.
