US judge considers whether Terraform Labs’ cryptocurrencies were securities

A US judge considered whether the digital assets created by Terraform Labs were securities at a hearing on Thursday, a question central to the US Securities and Exchange Commission’s fraud case against the company and its founder Do Kwon.

Kwon and Terraform Labs were behind two cryptocurrencies whose implosion roiled crypto markets around the world last year. They have asked US District Judge Jed Rakoff in Manhattan to dismiss the SEC’s case alleging they defrauded investors and sold billions of dollars in digital assets that were unregistered securities.

TerraUSD, an algorithmic stablecoin supposed to maintain a 1:1 peg to the US dollar, derived its value through another paired token called Luna.