Despite recent legal challenges, LUNC, the Terra Classic token, increased by over 5% in the last 24 hours.
This increase comes despite a U.S. District Court decision in favor of the Securities and Exchange Commission (SEC) in its legal pursuit against Terraform Labs, the entity in charge of the Terra blockchain.
This legal development casts doubt on the fate of LUNC, the crypto dealing with the fallout from Terra’s demise.
The origins of this legal battle can be traced back to the SEC’s claims in February, which focused on the once-mighty stablecoin, LUNA.
In May 2022, LUNA found itself at the center of a controversy, with the SEC claiming that it had outgrown the classification of a digital dollar and thus deserved to be classified as a security.
The SEC also claimed that Terraform Labs failed to register LUNA as a security, further complicating the legal landscape.
Legal Ruling: Judge Jed Rakoff’s recent judicial decision delivered a decisive blow, affirming the SEC’s position. Under this legal ruling, both LUNA and MIR, another token in the Terra ecosystem, are officially recognized as securities.
Terraform Labs, particularly co-founder Do Kwon, is now in a difficult position, accused of orchestrating the sale of these unregistered securities.
The court’s legal stance opens the door to potential further SEC actions against Terraform Labs, casting a shadow over LUNC’s future trajectory.