• Terraform Labs points to the SEC for misleading the court in the Debt Box / Digital Licensing case.
  • The defendant questions the financial regulator’s general use of excerpts of evidence and allegations in amended complaint.
  • Judge Shelby cited the financial regulator for misleadingly cajoling the court into imposing a temporary restraining order against Debt Box.

Terraform Labs is the latest to throw jabs at the US Securities & Exchange Commission (SEC), joining a court in Utah in threatening to sanction the financial regulator for reportedly lying in court. It concerns the Debt Box case, which the Commission had been pursuing with hopes to call the cryptocurrency trading platform to books.

Also Read: SEC lawyers face possible sanctions for undermining integrity of court proceedings in Debt Box case

Terraform Labs against the SEC

Terraform Labs wrote to Federal Judge Jed Rakoff in Utah on December 4, pointing out the SEC for misleading Rakoff in the Debt Box case concerning the trading platform’s digital licensing.

Terraform Labs vs SEC

The arguments, held between November 17 and 30, saw the SEC reportedly misrepresent evidence in court. On the fifth day of the trial, Judge Rakoff barred legal experts for the defense, Terraform Labs.

In an earlier report, the SEC was cited for the same violation, cajoling the court into imposing a temporary restraining order against the crypto firm. The regulatory body convinced the court to grant them a restraining order against the cryptocurrency firm using made-up “evidence” that has now proven to be cooked.

The SEC’s lawyers had claimed that Debt Box was trying to move its assets and investors’ funds overseas. With this claim, the court issued a restraining order against the firm, almost freezing its bank accounts in August. These claims turned out to be false.

It compelled Judge Robert Shelby of Utah to ask the SEC to convince the court with legitimate reasons for the deceit, lest sanctions be imposed.

Do Kwon extradition approved

Elsewhere, in Montenegro, the prosecution’s application to have Do Kwon extradited was approved by the Basic Court in Podgorica. Notably, where the Montenegrin justice minister would extradite Kwon to remains unknown. The court said the Terra founder would be repatriated after serving a four-month sentence for forging documents.

Terraform Labs is moving toward a January 2024 trial, unless there is a summary judgment.


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