TechFlow news: Terraform Labs stated that its recent bankruptcy filing would provide an opportunity for a "last-ditch" appeal in the securities fraud case brought by the U.S. Securities and Exchange Commission (SEC).
Last December, a judge ruled that Terraform Labs and its founder violated U.S. law by failing to register two digital tokens, triggering turmoil in the cryptocurrency market. Although the remaining fraud charges are set for trial in March, Terraform Labs noted in its bankruptcy court filings that the company may be unable to pay any undetermined judgment amount or fund an appeal.
The company holds approximately $28 million in Bitcoin, $7 million in other cryptocurrencies, and $87 million in Luna tokens.
Terraform Labs plans to argue in its appeal that the SEC lacks jurisdiction over the company because its cryptocurrency tokens do not qualify as "securities." The company added that Chapter 11 bankruptcy could allow it to appeal without posting a bond, thereby avoiding liquidation following the trial.
