Judge considers Terraform Labs’ LUNA and MIR as securities



A U.S. federal judge has ruled in favor of the Securities and Exchange Commission (SEC) in a case against Terraform Labs and its former CEO Do Kwon.

According to a U.S. court’s decision, Terraform Labs and Do Kwon sold two unregistered securities, referring to the LUNA, UST, and MIR tokens. District Court Judge Jed Rakoff made the decision on Dec. 28.

The court cited Kwon’s previous commentary, which stated that LUNA holders simply need to “[s]it back and watch [him] kick-ass” to conclude that LUNA meets the Howey test.

Concerning the MIR token, the court held that the defendants could not seriously dispute that they caused MIR holders to expect profits from a joint enterprise based on Terraform’s efforts to develop, maintain, and evolve the Mirror Protocol.

“In other words, that MIR passes the Howey test with flying colors.”

Terraform Labs and SEC agree on confidentiality terms as trial approaches

In February, the SEC sued Terraform Labs and Do Kwon, alleging they raised billions of dollars from investors by selling them securities under the guise of cryptocurrencies. In a lawsuit filed in the Southern District of New York, the regulator claimed that Terraform sold investors securities under the guise of crypto assets, promising that the tokens would increase in value.

Beginning in April 2018, Kwon raised billions of dollars from investors by selling them Terraform-issued cryptocurrencies and various other digital assets, many of which were unregistered securities, the SEC alleges. The lawsuit says Kwon misled investors about the stability of UST and claimed that his company’s tokens would increase in value.

Do Kwon is now awaiting a court decision in Montenegro. At the beginning of December 2023, information appeared that Montenegro was planning to extradite Do Kwon to the United States. That decision however still needs to be confirmed by a Montenegrin court, which overturned a decision to extradite Kwon on Dec. 19.

Source : crypto.news by Anna Kharton / Dec 29, 2023

rayn.finance logo


240 rue Evariste Galois,

06410 Biot,

Sophia Antipolis

Automata Pay

65-66 Warwick House 4th

Floor, Queen Street, London

England, EC4R 1EB

Automata Pay Europe Ltd

3rd Floor Ormond Building,

31-36 Ormond Quay Upper,

Dublin 7, D07 Ee37

Automata ICO Ltd

Italian Branch

Via Archimede, 161,

00197 Roma


The purchase of digital assets is subject to a high market risk and price volatility. Changes in value can be significant and occur rapidly and without warning. Past performance is not a reliable indicator of future performance. The value of an investment and returns can fluctuate both up and down, and you may not recover the amount you invested. RISK WARNING

Automata ICO Limited has a branch in Italy with its registered office at Via Archimede, 161, Roma, Italy, and registered in Italy under number 96550860587 with the Organismo Agenti e Mediatori (OAM) as a Virtual Asset Service Provider (VASP).

Automata France SAS is a company registered in France with the company number 902 498 617. Automata FRANCE SAS is registered with the french Financial Market Authority, l’Autorité des marchés financiers (“AMF”), as a provider of Virtual Asset Service Provider under number E2023-087.

Automata Pay Europe Limited is a partner of Modulr Finance B.V., a company registered in the Netherlands with company number 81852401, which is authorised and regulated by the Dutch Central Bank (DNB) as an Electronic Money Institution (Firm Reference Number: R182870) for the issuance of electronic money and payment services. Your account and related payment services are provided by Modulr Finance B.V. Your funds will be held in one or more segregated accounts and safeguarded in line with the Financial Supervision Act. How we keep your money safe.