SEC Rebuts Terraform’s Arguments Regarding Applicability of Enforcement of Offshore Token Offerings and Sales

Lawyers for the U.S. SEC have responded to a memorandum from Terraform Labs that proposes remedies for post-judgment decisions in civil cases. In a filing with the U.S. District Court for the Southern District of New York on May 6, the U.S. SEC refuted Terraform's argument for reducing disgorgement in a civil case verdict, for which a jury found the company liable. SEC lawyers said Terraform and co-founder Do Kwon had never raised arguments in court about the extraterritorial application of the SEC's enforcement of federal laws on token issuance and sales outside the United States. The SEC's filing states that the defendants' arguments lack basis because they rely on misapplication of the law and misrepresentation of relevant facts. (Cointelegraph) Earlier, after the U.S. SEC asked Terraform Labs to pay a $5.3 billion fine, the latter's lawyers fought back. In a brief filed on Wednesday, the company's lawyers argued that Terraform's token issuance and sales "occurred almost entirely outside the United States." Meanwhile, the SEC argued that the company “targeted U.S. investors” and said they should pay a $5.3 billion fine, much of which is being sought in disgorgement. Terraform said: “…the SEC has not presented any evidence that the defendants’ limited activities in the United States directly caused any losses, let alone the billions of dollars in disgorgement that the SEC is seeking.”