Former CFTC Chairman Agrees with SEC’s Action on Terraform Labs

02/18/2023 22:21 • Tech Ticker • 156 views

According to reports, Timothy Massad, former chairman of the United States Commodity Futures Trading Commission (CFTC), said that it was absolutely correct for the United States Securities and Exchange Commission (SEC) to track down the issuer of stable currency Terraform Labs and founder Do Kwon. Massad said, “When you invite people to invest in a token with a promised return of 19% to 20%, this is a security.”

Former Chairman of CFTC: The SEC’s prosecution of Terraform Labs and Do Kwon is “absolutely correct”

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Timothy Massad, the former chairman of the CFTC, recently spoke out about the SEC’s move to go after Terraform Labs, the issuer of the stable currency LUNA, and its founder, Do Kwon. According to reports, Massad praised the SEC’s investigation and said that it was entirely justified. He cited the fact that Terraform Labs had promised investors a return of 19% to 20% as evidence that LUNA was actually a security, rather than a true stablecoin.

This statement from Massad should come as no surprise, given his previous work at the CFTC. As the head of the commission from 2014 to 2017, he was responsible for overseeing the regulation of derivatives markets, including cryptocurrency futures contracts. During his tenure, he was often vocal about the need for clearer rules and guidelines around the cryptocurrency space.

In the case of Terraform Labs, Massad’s position is clear: the company and its founder should be held accountable for any actions that run afoul of securities laws. Given the promises of high returns and the fact that investors were essentially betting on the success of a single company, it’s hard to argue that LUNA wasn’t being marketed as a security. This is an important distinction, as securities are subject to a higher level of regulation and oversight than other types of assets.

Of course, there will always be those who argue that the SEC is overstepping its bounds in going after cryptocurrency companies. Some believe that the agency’s efforts are motivated more by politics and a desire to control the emerging blockchain industry than any legitimate concerns over investor safety. However, Massad’s comments suggest that at least some former regulators are supportive of the SEC’s actions.

As cryptocurrency continues to grow and evolve, it’s likely that we’ll see more regulatory actions like this in the future. Whether or not you agree with the SEC’s approach, it’s clear that companies like Terraform Labs will need to be much more careful about how they market their tokens if they hope to avoid scrutiny from regulators.

Overall, Massad’s comments highlight the ongoing struggle to balance innovation and regulation in the cryptocurrency space. By acknowledging that LUNA may indeed be a security, he is sending a message to both investors and companies that they need to be much more careful about how they approach the market.

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Former CFTC Chairman Agrees with SEC’s Action on Terraform Labs

Former Chairman of CFTC: The SEC’s prosecution of Terraform Labs and Do Kwon is “absolutely correct”

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