SEC’s Lawsuit Against Terraform Labs Could be a Roadmap to Ban Other Stable Currencies
It is reported that Gabriel Shapiro, the general counsel of Delphi Labs, said on Twitter that the lawsuit of the United States Securities and Exchange Commissi…
It is reported that Gabriel Shapiro, the general counsel of Delphi Labs, said on Twitter that the lawsuit of the United States Securities and Exchange Commission (SEC) against Terraform Labs and its co-founder Do Kwon could be regarded as the “road map” of the SEC to ban other stable currencies. Shapiro said that the SEC’s argument in the lawsuit was “more thorough than usual”. The SEC’s lawsuit has four firsts: 1. It claims that the stable currency (UST) is a security; 2. It is claimed that the synthetic stock (mAsset) is a (security) swap; 3. Claim that “Encapsulated Token” (wLUNA) is a kind of security. 4. The Howey test is not used for tokens, but the argument of “enumerating securities” is used to support its view that wLUNA is the “receipt” of securities and therefore the securities.
Lawyer: The SEC’s lawsuit against Terra can be seen as the “road map” for the SEC to ban other stable currencies
Interpretation of the news:
The United States Securities and Exchange Commission (SEC) has filed a lawsuit against Terraform Labs and its co-founder Do Kwon, claiming that the stable currency UST, synthetic stock mAsset, and Encapsulated Token wLUNA are securities. Gabriel Shapiro, the general counsel of Delphi Labs, has noted on Twitter that this lawsuit could pave the way for the SEC to ban other stable currencies.
In his tweet, Shapiro pointed out that the SEC’s argument in the lawsuit is more thorough than usual. The SEC’s lawsuit presents four firsts, including claiming that the stable currency UST is a security, the synthetic stock mAsset is a (security) swap, and the Encapsulated Token wLUNA is a kind of security. Furthermore, the SEC has not relied on the Howey Test for assessing tokens but instead uses the “enumerating securities” argument to support its view that wLUNA is the “receipt” of securities and is therefore itself a security.
The SEC’s move is significant as stable coins have become increasingly popular in recent years, with Tether being the most widely used stable coin in circulation, accounting for over 60% of the total stable coin market cap. Stable coins are digital currencies pegged to real-world assets, typically the US dollar, to maintain price stability. They are often used as a store of value or as a medium of exchange, making them a favorite among cryptocurrency traders and investors.
However, the regulatory environment for stable coins has been unclear, with many countries still debating how to classify them. The SEC’s lawsuit against Terraform Labs may be seen as setting a precedent for the treatment of stable coins and potentially lead to a wider crackdown against stable coins.
In conclusion, the SEC’s lawsuit against Terraform Labs may reshape the regulatory landscape for stable coins. The lawsuit’s comprehensive argumentation and claims could signal the SEC’s intent to regulate stable coins more tightly, potentially leading to a wider crackdown against these digital currencies. This situation may lead to a polarizing effect on investors and traders who have varied opinions on the regulation of stable coins.
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