The SEC (Securities & Exchange Commission for the United States) lawsuit that is up against Labs of Terraform along with Do Kwon, co-founder, is a form of a roadmap. Delphi Labs’ lawyer has stated that this SEC lawsuit is simply an attack against their future strategies against the other stablecoins.
Delphi Labs Investment General Counsel, Gabriel Shapiro, shared on his Twitter page on 16th February. He tweeted that the complaints mentioned by the lawsuit of SEC against Terraform and Kwon have been more thorough than they usually care to in other lawsuits.
Confidence And Attacking Nature in Delphi Labs
The analysis provided by Shapiro in his tweet that was shared with his massive 33,800 Twitter followers, came after the lawsuit on 16th February. Delphi Labs has been accused of arranging a cryptocurrency fraud involving multi-billion dollar asset securities. Shapiro further added that the lawsuit stated that Delphi Labs was involved in the fraud of algorithmic stablecoin as well.
He has suggested that this lawsuit might act as the roadmap to show how regulations might litigate other stablecoins with false lawsuits in the coming time. He also accepted that SEC attacked the algorithm stablecoin of Terra named TerraClassicUSD (USTC).
Cryptocurrency Litigations Involving Stablecoins
Shapiro also pointed at the 4 prongs involving the Howey test mentioned by the SEC that argues the USTC includes all securities owned by the laws of the US. The SEC has said there were breaches by Terraform labs when they introduced Mirror Protocol that permitted users to make “mAsset”. Users could mirror the behavioral pattern of prices of alternate assets like stocks.
Since LUNC was related to USTC, their prices dropped by a massive 100% which urged a bigger downward spiral across the crypto market by reducing almost $40 billion. Although Kwon claims not to elope, there is an arrest warrant.