• The SEC has accused and charged Do Kwon and Terraform Labs for allegedly selling a “suite of crypto asset securities.”
• Crypto lawyers have responded to the SEC’s actions, questioning the manner in which it is going after the company and its founder.
• Some lawyers are concerned that the SEC is exercising too much discretion in applying securities laws to any transactions.
SEC Charges Terraform Labs
The United States Securities and Exchange Commission (SEC) has accused and charged Do Kwon, founder of Terraform Labs, for allegedly selling a “suite of crypto asset securities.” This has sparked various reactions from lawyers within the crypto community.
Community Questions Manner of Action
Members of the crypto community are not defending Terra or Kwon; however, they are questioning the manner in which the SEC is taking action against them. Web3 lawyer Mike Selig posted his thoughts on Twitter, where he noted that under this theory “nearly anything can be a security.” Mike Wawszczak, general counsel for Alliance DAO also commented on the issue by saying that it appears as if SEC Chairperson Gary Gensler wants complete discretion concerning how to apply securities laws. Justin Browder from Willkie Farr & Gallagher likened USTC’s use to generate returns on another protocol to depositing fiat into a bank and questioned whether there is another non-security currency that does not behave like that; ultimately he described these actions as “wild.”
Reactions From Crypto Lawyers
Crypto lawyers have expressed their reactions over this news with questions towards how exactly the SEC is going about taking action against Terraform Labs and its founder. Web3 lawyer Mike Selig suggested that according to this theory “nearly anything can be a security,” while Mike Wawszczak feels it looks like Chairman Gensler wants complete discretion when applying securities laws to any transactions. Justin Browder then compared USTC’s use to generate returns on another protocol to depositing fiat into a bank and asked whether there was another non-security currency out there that did not work similarly; ultimately he described these actions as “wild.”
Crypto Community Not Defending Terra or Kwon
Community members are not defending either Terra or Kwon but they are asking why exactly the SEC is taking such drastic measures against them specifically. They feel as if there could be other ways through which Do Kwon could pay for his mistakes without having such extreme consequences from an institutional level such as those being proposed by the SEC now.
Overall, members of both legal communities in addition to those in cryptocurrency circles have voiced serious concerns regarding how exactly the U.S Securities & Exchange Commission (SEC) may go about seeking justice in this case involving Do Kwon, founder of Terraform Labs, who stands accused for allegedly selling a suite of crypto asset securities. As evidenced by responses from both Web3 lawyer Mike Selig along with Alliance DAO general counsel Mike Wawszczak – followed up by partner at Willkie Farr & Gallagher Justin Browder – people appear worried about how arbitrary things can get when dealing with regulatory bodies like this one at an institutional level when dealing with relatively new technology such as cryptocurrencies today.