Summary
Terraform Labs pushes back against SEC objection to $166 million retainer, calling it government overreach. It argues that it needs to pay legal fees to defend against upcoming civil enforcement action and grand jury investigation. SEC objects to retainer payment to Dentons, arguing potential conflict of interest. Terraform Labs filed for Chapter 11 bankruptcy last month after collapse of LUNA and UST cryptocurrencies. Founder Do Kwon serving jail sentence in Montenegro, faces extradition to U.S. for civil fraud suit.
Key Points
1. Terraform Labs pushed back against the SEC’s objection to a $166 million retainer paid to law firm Dentons, calling it government overreach and a tactic to disadvantage them before trial.
2. Terraform Labs argued that the court should overrule the SEC’s objections and approve the retainer to Dentons, stating that the objections were based on misapplications of law and factual misstatements.
3. The SEC objected to the retainer payment, citing potential conflicts of interest and arguing that Dentons should be blocked from representing Terraform Labs unless it returns part of the retainer and its fees are subject to oversight from the bankruptcy court.