Terraform Labs lawyers seek dismissal of class-action suit in the United States

Lawyers for Terraform Labs (TFL) filed in the United States District Court for the Northern District of California a motion to dismiss the class-action suit against the firm and its head Do Kwon. A copy of the document published by Law360.

the investors’ complaint from June 2022. They accused the defendants of selling unregistered securities, as well as making false statements about the stability of the TerraUSD (UST) stablecoin and the related token LUNA.

In the firm’s view, U.S. law does not apply to protocols developed and used abroad. The complaint also does not adequately set forth evidence that the alleged fraud occurred inside the United States, the lawyers noted.

Earlier, lawyers for TFL and Do Kwon filed a request with a U.S. court to dismiss the charges, brought by the U.S. Securities and Exchange Commission. In the appeal, they argued that UST does not fall within the commission’s jurisdiction, as it is a currency.

Meanwhile, it became known that the court in South Korea did not recognize LUNA as a security.

On 23 March, Do Kwon was arrested while attempting to depart Podgorica airport for Dubai on forged documents. The detention followed requests from law enforcement authorities in the United States, Singapore and South Korea.

On 29 March, it was announced that the head of TFL would appear before a court in Montenegro prior to extradition. He has already been charged with using a forged passport.

The U.S. Attorney’s Office in the Southern District of New York also brought charges against Kwon.