John Smith believes the company made a calculated and strategic decision by filing for insolvency. The bottom line: bankruptcy will play a crucial role in the ongoing battle against the US Securities and Exchange Commission (SEC).
“The decision to file for bankruptcy is not a knee-jerk reaction to financial difficulties but a well-thought-out approach to tackling the problems posed by the SEC. Typically, appealing against the SEC requires putting up collateral worth 110% of the total amount claimed. However, the law allows Terraform Labs to file an appeal without the financial burden,” explained John Smith.
The CEO emphasized that Terraform Labs’ upcoming appeal aims to invalidate the SEC’s charges and demonstrate that the regulatory body lacks the necessary authority.
Previously, the US Securities and Exchange Commission requested the court to clarify whether the cryptoassets sold by Terraform Labs are unregistered securities. The SEC firmly believes that the cryptocurrencies Terra Luna Classic (LUNC), TerraClassicUSD (USTC), Mirror Protocol (MIR), and the so-called “mirror assets” (Mirrored Assets, mAssets) involved in the Terraform Labs case fulfill the criteria for being classified as securities.