“Wild” – SEC Prosecuting Terra Sparks Reaction from Crypto Advocates

Terraform Labs and its founder Do Kwon are in the sights of the US Securities and Exchange Commission (SEC), which has sparked mixed reactions from lawyers within the crypto community.

in feb. On September 16, the Securities and Exchange Commission (SEC) indicted and charged Kwon and Terraform Labs for allegedly selling “a batch of crypto-asset securities.” While members of the community do not defend Kwon from his actions, they question how the SEC is going to go after Tira and its founder.

Web3 attorney Mike Selig posted his thoughts on the case on Twitter. According to Selig, the SEC describes the algorithmic stablecoin TerraUSD Classic (USTC) as a security because it can be exchanged for Terra (LUNA), now known as Luna Classic (LUNC), which is also a security according to the SEC. Selig to explain that under this theory, “almost anything can be a security.”

Mike Wawszczak, General Counsel of Alliance DAO, also commented on this topic. According to Wawszczak, SEC Chairman Gary Gensler may “in full discretion” wish to apply securities laws to any transactions. chirp:

Hmm

It’s hard to read SEC v. TFL complains and does not conclude that Gensler’s boss wants complete discretion to apply securities laws to any transaction he wants.

For this job, he asked for $2.2 billion in fiscal year 2023.

(For comparison, San Francisco’s budget last year was $13 billion) https://t.co/BlcWyFgp4H

– Mike Wawszczak (@mikedotwaves) February 17, 2023

Justin Browder, partner at law firm Willkie Farr & Gallagher, was impressed by the SEC’s description of using the USTC to generate returns on another protocol of “depositing securities in a bank.” The lawyer also wondered if there was another non-security currency that did not behave in this way. Ultimately, Browder called the SEC’s actions “wild.”

Aside from the lawyers, other members of the crypto community have also added to the conversation. Dylan Daniel Believes That if everything becomes a security, the SEC will have to broaden itself. Web3 community member hopes Gensler has a solid plan.

Related: Terra lawsuit a ‘roadmap’ for attacking other stablecoins: Delphi Labs

in feb. 13, Similar sentiments were expressed on Twitter when the SEC decided to pursue Paxos, claiming that the Binance USD (BUSD) stablecoin is a security. Many community members were confused and argued that stablecoin users are not buying it and expecting its price to go up.