The US Securities and Exchange Commission (SEC) has asked a judge, rather than a jury, to determine whether the specific cryptocurrencies involved in the Terraform Labs case are classified as securities.
In a Dec. 4 filing, the SEC asked the presiding judge to determine whether certain cryptoassets are securities, a function traditionally reserved for a jury.
The central part of the SEC’s argument rests on the application of the Howey test, a long-standing benchmark for defining a security. The commission firmly believes that the cryptocurrencies involved in this case meet the criteria of an investment of money in a common enterprise, and profits are expected predominantly from the efforts of others.
The SEC filing said: “There is no genuine dispute about the material fact that Defendants’ cryptoasset offerings involved an investment of money, in a common enterprise, with the expectation of profits derived from Defendants’ efforts. “. This statement underscores his confidence in the simplicity of the case, suggesting that jury deliberation is not necessary.
This SEC intervention is part of a broader pattern in which the commission actively classifies cryptocurrencies as securities, as evidenced by its actions against industry giants like Binance and Coinbase. In the notable case against Ripple, a federal judge’s ruling on the XRP token indicated that it might not be classified as a security, which could influence the SEC’s future dealings with Ripple’s top executives.
