The Terraform Labs Co-founder and CEO Do Kwon’s legal team has taken aim at the United States Securities and Exchange Commission (SEC), claiming that Terra coins are not securities.

The lawyers claimed that the SEC charges against Terraform, Kwon, and other executives were unfounded and filed a motion to dismiss the charges.

According to EDaily and Bloomberg, Kwon’s lawyers claim that Terra stablecoins are “currencies.”

They claim that because of this, the SEC has no jurisdiction over Terraform.

The SEC has charged Kwon and others with trading unregistered securities with knowledge.

Prosecutors in South Korea are also hoping to bring Kwon to trial on similar charges.

However, legal experts in the country believe this will be difficult.

Cryptoassets are not currently classified as securities under South Korean law.

According to Kwon’s lawyers, the SEC is powerless to “assert jurisdiction over the digital assets in this case using federal securities law.”

The lawyers also stated that they had requested that the lawsuit be dismissed by an American court, claiming that the SEC was using “outdated regulations.”

This is a reference to the much-maligned American securities laws of the early 1930s.

Many crypto advocates in the United States have previously advocated for cryptocurrency to be exempt from SEC regulation.

However, the SEC has recently pushed back, with its Chairman indicating that many popular tokens may be securities.

Could Do Kwon’s Legal Team Derail SEC’s Case?

The SEC’s classification of cryptoassets as securities, according to Kwon’s lawyers, is unclear.

According to the lawyers:

“The SEC’s improper assertion of power […] by trying to shoehorn all cryptocurrencies into its definition of a ‘security’ fails.”

They further added:

“The SEC’s attempt to regulate cryptocurrencies using outdated laws is inappropriate.”

Prosecutors in South Korea moved earlier this month to freeze more of Kwon’s crypto and fiat holdings.

However, Kwon’s legal situation is far from clear.

He is currently in Montenegro, where he was charged with forgery-related crimes by local authorities last week.

According to local media, Kwon will appear in court on May 11.

Kwon is also sought in Singapore, where Terraform was founded in 2018.

Last week, media outlets reported that Kwon paid $7 million to South Korea’s largest law firm, Kim & Chang, just before the Terra coin’s demise in May of last year.

Prior to the collapse, Kwon also closed his South Korean businesses and left the country.