According to Bill Morgan, the promotion of UST, LUNA, and YIELD is the main problem with the Terra case.
Crypto attorney Bill Morgan tweeted back to Coin Routes co-CEO Dave Weisberger, addressing his comments on Terra. Morgan and Weisberger agree that Do Kwon’s promotion of UST, LUNA, and YIELD via Anchor Protocol is the main problem with the Terra case.
According to Weisberger, Kwon assured the public that he would see the project through to a successful conclusion and even promised returns. He clarified that the transaction was only related to investment contracts and had nothing to do with cryptocurrency tokens.
In response to Weisberger’s argument, Morgan pointed out that the Terra case may stand on its own merits, similar to the Torres ruling on Ripple’s XRP sales, as it was a fact-specific application of the Howey test. He claims it may not be as applicable or convincing as the Torres ruling to the circumstances surrounding the Binance and Coinbase cases.
In addition, the crypto lawyer stressed that the facts are usually the deciding factor in cases, particularly when important legal questions are subject to tests that are fact-sensitive. Therefore, he finds it intriguing to contemplate which argument gains more traction in such instances.
As part of his argument, Weisberger brought attention to the fact that the US Securities and Exchange Commission (SEC) had issued a strong rejection. The SEC still refuses to acknowledge that existing securities regulations do not permit the secondary market trading of instruments that do not reflect an enterprise’s ownership or debt.
Even if the rules aren’t fully fleshed out, he said that they may be based on some important principles, like the laws of marketing and manipulation. In his opinion, these rules only apply to tokens that the issuer has either directly issued or sponsored.
The SEC is reportedly hoping that the Terraform Labs victory will strengthen accusations against Binance and Coinbase, according to Coindesk’s January 6 story.
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