Paradigm, a venture capital firm investing in crypto and Web3 companies, recently filed an amicus brief to oppose the SEC (Securities and Exchange Commission)'s effort of bringing stablecoins under its remit. According to the brief, the firm was not a Terra investor and the sole purpose of the brief was to oppose the SEC's effort to extending its authority over cryptocurrency. Rodrigo from the firm mentioned that the SEC was trying to extend its authority by advancing the theory that any instrument exchanged for a ‘crypto asset security’ becomes a ‘crypto asset security’ itself.

The SEC has sued Do Kwon, the owner of Terraform Laboratories, this month following the collapse of his multi-billion dollar crypto venture in May 2022. Kwon was found in Montenegro, trying to travel with fake documents. In its civil complaint, however, the SEC failed to establish personal jurisdiction against Kwon, since the items mentioned by the agency were accessible worldwide and not intended for US citizens. The stable coin, UST, which is implicated in the lawsuit, is also claimed not to be subject to SEC oversight since it is a currency rather than a security.

In the light of such events, Paradigm issued a policy article on April 21st which directly opposed the stance taken by SEC Chair Gary Gensler. According to Paradigm, Mr. Gensler's effort to consider crypto assets as securities lacked transparency and accuracy. The firm also claims that the SEC is failing to provide crypto asset investors and users with the necessary information and that it questions the SEC's statements regarding the feasible routes to crypto compliance.



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