Terraform Labs and its founder Do Kwon are preparing a strategic move against the SEC in an ongoing legal battle in the Southern District of New York. Kwon is set to challenge the testimony of key expert witness Dr. Matthew Edman.
Terraform and Kwon’s legal team argue for a reevaluation of the court’s stance, which is heavily based on Dr. Edman’s testimony. They also highlight the court’s failure to acknowledge the lack of necessary data to verify Dr. Edman’s claims.
The initial court decision seemed to reverse the burden of proof, noting that the defendants could not produce certain inputs for the LP Servers. Terraform Labs, however, points out that Chai, not the defendants, owns the LP Server and related inputs, a detail previously acknowledged by the court in a different context.
Defendants emphasize recent changes to Federal Rule of Evidence 702, effective December 1, 2023, as a significant legal development that could turn the case in their favor. They argue that Dr. Edman’s testimony fails to meet these new standards, as it lacks a clear explanation of methods and is based on assumptions without supporting evidence.
Terraform Labs and Kwon assert that the court’s opinion does not properly consider these changes, creating a compelling case for overturning the decision. Amidst the challenging legal process, Terraform and Kwon continue to dispute the SEC’s case, seeking a more favorable outcome by challenging Dr. Edman’s testimony.