A US judge has denied Terraform Labs’ motion to dismiss a lawsuit filed by the US Securities and Exchange Commission (SEC). The lawsuit accuses Terraform Labs and its founder of orchestrating a multi-billion dollar crypto asset securities fraud. The judge’s decision also rejected a previous ruling that Ripple did not violate securities laws, setting the stage for the SEC’s lawsuit against Terraform Labs to proceed. Terraform Labs argued that the SEC lacked jurisdiction over the company and disputed the classification of their tokens as securities. However, the judge ruled that the SEC has authority to regulate crypto tokens without specific Congressional authorization. The outcome of the lawsuit could have significant implications for cryptocurrency regulation in the US.
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