Terra LUNA
Scrutiny On Terra Luna Classic, Chiliz & The Sandbox
Another token under scrutiny is $CHZ , the utility token for Chiliz. It is used on the Socios platform for fan engagement in sports and entertainment. #CHZ enables fans to purchase and influence decisions in their favorite teams through voting rights and rewards programs.
The SEC alleges that CHZ was promoted as an investment opportunity. It highlighted funds were raised explicitly earmarked for platform development, user acquisition, and marketing efforts. These factors all contributed to potential increases in CHZ’s value.
SAND, the token of The Sandbox, a virtual gaming platform powered by blockchain, is also highlighted in the SEC’s litigation. The SEC argues that $SAND ’s initial offering portrayed it as an investment vehicle. Hence, it is subject to securities regulations due to the expected returns tied to the platform’s success.
Lastly, Terra Luna Classic (LUNA), the native token of Terra, is included in the SEC’s classification as a security. #LUNA✅ facilitates stablecoin transactions and platform governance within Terra’s ecosystem. The SEC asserts that Terra Luna Classic’s issuance and trading involved expectations of profit. These expections were based on Terraform’s development efforts and market adoption of Terra’s stablecoin solutions.
The SEC also highlighted that in 2021, Terraform’s head of business development deemed #TerraLunaClassic “equity” in their company. Moreover, Terraform CEO #DoKwon once wrote, “LUNA value is viable in the long run — growing as the ecosystem grows.” A director stated in June 2021 that “owning LUNA is essentially owning a portion of the network.”
Additionally, Terraform’s marketing emphasized their team’s expertise. These factors led the Federal Court for the Southern District of New York to rule on December 28, 2023, that $LUNA and wLUNA were sold as investment contracts. Moreover, the SEC seeks to stand by this ruling.
