Lawyer: The SEC’s lawsuit against Terra can be seen as the “road map” for the SEC to ban other stable currencies

It is reported that Gabriel Shapiro, the general counsel of Delphi Labs, said on Twitter that the lawsuit of the United States Securities and Exchange Commission (SEC) against Terraform Labs and its co-founder Do Kwon could be regarded as the “road map” of the SEC to ban other stable currencies. Shapiro said that the SEC’s argument in the lawsuit was “more thorough than usual”. The SEC’s lawsuit has four firsts: 1. It claims that the stable currency (UST) is a security; 2. It is claimed that the synthetic stock (mAsset) is a (security) swap; 3. Claim that “Encapsulated Token” (wLUNA) is a kind of security. 4. The Howey test is not used for tokens, but the argument of “enumerating securities” is used to support its view that wLUNA is the “receipt” of securities and therefore the securities.

Interpretation of this information:

Gabriel Shapiro, the general counsel of Delphi Labs, took to Twitter to express his thoughts on the lawsuit filed by the SEC against Terraform Labs and its co-founder Do Kwon. He stated that the SEC’s argument in this lawsuit was more comprehensive than usual and could serve as a roadmap for the commission to ban other stable currencies. The SEC’s lawsuit is notable for making four new claims: that the stable currency (UST) is a security, that the synthetic stock (mAsset) is a (security) swap, that “Encapsulated Token” (wLUNA) is a type of security, and that the Howey test is not used for tokens but that the argument of “enumerating securities” is used to support the SEC’s view that wLUNA is a “receipt” of securities, and therefore a security.

Shapiro’s interpretation of the SEC lawsuit highlights the commission’s focus on regulating stable currencies. The SEC has taken the position that stable currencies are a form of security and should be subject to regulation by the commission. The lawsuit serves as a warning to other stable currency issuers and suggests that the SEC will take a harder line in the future.

The SEC lawsuit’s claim that the synthetic stock (mAsset) is a (security) swap is also noteworthy. This claim suggests that the SEC will be looking at other asset classes beyond stable currencies and that any financial derivative product could be considered a security. Such a view could have significant ramifications for the broader financial industry.

The lawsuit’s assertion that wLUNA is a “receipt” of securities is also significant. This claim suggests that the SEC is moving away from the Howey test, which has traditionally been used to determine whether a token is a security or not. Instead, the SEC is looking to enumerate securities and treating any token that falls under this classification as a security.

In conclusion, the SEC’s lawsuit against Terraform Labs and Do Kwon has significant implications for the wider cryptocurrency industry. The commission’s focus on regulating stable currencies, the potential classification of other financial derivative products as securities, and the new approach to determining whether a token is a security will all impact the industry.