- Bill Morgan believes the significant issue in the Terra case is the marketing of UST, LUNA, and YIELD.
- Dave Weisberger noted that Kwon guaranteed returns and told the public he would ensure Terra’s success.
- According to Morgan, the Terra decision may have less relevance than the facts in the Coinbase and Binance matters
Crypto lawyer Bill Morgan acknowledged the thoughts of the co-CEO of Coin Routes, Dave Weisberger, with regard to Terra in a Twitter post. Both Morgan and Weisberger believe the significant issue in the Terra case is the marketing of UST, LUNA, and YIELD through Anchor Protocol by Do Kwon.
Weisberger noted that Kwon guaranteed returns and told the public he would ensure the project’s success. He described the move as an investment contract, noting that it had nothing to do with the crypto tokens.
Acknowledging Weisberger’s position, Morgan noted that the Terra case was a fact-specific application of the Howey test and may be as singular and standalone as the Torres decision on Ripple sales of XRP. According to him, it may have less relevance and persuasive value than the Torres decision to the facts in the Coinbase and Binance matters.
The crypto lawyer further explained that most cases turn on their facts, especially when the test applied to key legal issues is sensitive to specific facts. Hence, he thinks it will be interesting to see which case becomes more persuasive in these types of cases.
While explaining his position, Weisberger noted a significant denial by the US Securities and Exchange Commission (SEC). According to him, the SEC continues to deny that the current securities rules have no provision for secondary market trading of instruments that do not represent ownership or debt of an enterprise.
He further noted that while the rules are incomplete, certain key principles can be applied, such as marketing and manipulation rules. He believes such principles can only be applicable with primary issuance or issuer-supported/marketed tokens.
On January 6, Coindesk reported that the SEC hopes the Terraform Labs win might bolster cases against Coinbase and Binance.
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