The
U.S.
Securities
and
Exchange
Commission
(SEC)
has
been
blowing
a
horn
in
its
various
legal
clashes
with
crypto
exchanges,
asking
courts
to
see
how
its
recent
win
in
the
Terraform
Labs
dispute
should
convince
other
judges
that
the
regulator
is
right
about
platforms
like
Coinbase
and
Binance
trading
unregistered
securities.
While
the
SEC
has
suffered
a
number
of
setbacks
in
its
crypto
court
cases,
such
as
in
its
lawsuit
against
Ripple
and
in
Grayscale
Investments’
success
challenging
the
agency’s
spot
bitcoin
exchange
traded
fund
(ETF)
application
rejection,
the
regulator
chalked
up
a
victory
last
week
in
its
contention
that
Terraform
was
improperly
offering
securities
through
its
Terra/Luna
stablecoin
offerings
and
the
Mirror
Protocol.
“The
Terraform
court
resolved
in
the
SEC’s
favor
issues
relevant
to
the
consideration
of
defendants’
motion
in
this
case,”
an
SEC
lawyer
submitted
to
Judge
Katherina
Polk
Failla
in
a
January
4
filing
in
its
court
clash
with
Coinbase.
That
follows
a
similar
filing
the
day
before
in
the
SEC’s
dispute
with
Binance,
meant
to
point
out
to
other
judges
that
the
agency’s
argument
had
prevailed
elsewhere.
Judge
Jed
Rakoff,
the
U.S.
District
Court
for
the
Southern
District
of
New
York
judge
overseeing
the
Terra
case,
sided
with
the
SEC
in
an
end-of-year
ruling.
In
it,
he
said
that
the
case
from
defendants
Terraform
and
founder
Do
Kwon
“asks
this
court
to
cast
aside
decades
of
settled
law
of
the
Supreme
Court,”
the
judge
determined.
“The
court
declines
the
defendants’
invitation.”
“There
is
no
genuine
dispute”
that
tokens
UST,
LUNA
and
MIR
are
investment
contracts
in
this
context,
according
to
Rakoff’s
decision.
The
SEC
contends
that
the
finding
on
those
tokens
overlaps
with
accusations
in
the
Coinbase
and
Binance
cases,
in
which
the
platforms
are
accused
of
hosting
the
trading
of
unregistered
securities.
Other
judges
may
not
see
it
the
same
way.
“It
does
not
negate
prior
SEC
court
losses
or
partial
wins,”
TD
Cowen
analyst
Jaret
Seiberg
wrote
in
a
client
note.
“Rather,
it
is
a
continuation
in
the
development
of
the
law
as
more
judges
assess
how
the
securities
laws
apply
to
crypto
products.”
Seiberg
noted
that
decisions
at
the
district
court
level
on
which
crypto
assets
fit
the
legal
definition
of
a
security
will
eventually
be
overshadowed
by
the
federal
appeals
courts
and,
possibly,
the
Supreme
Court.
But
he
said
“that
process
will
take
years.”
A
trial
is
set
for
January
29
to
settle
the
remaining
disputes
in
the
SEC
case
against
Terraform
and
Do
Kwon.
A
spokesperson
told
CoinDesk
the
company
strongly
disagrees
with
Rakoff’s
decision
and
“will
continue
to
vigorously
defend
against
those
meritless
allegations
at
trial.”
A
spokeswoman
for
Coinbase
declined
to
comment
on
the
SEC’s
most
recent
filing
in
that
case.
