The U.S. SEC questions Terraform Labs' payment of $166 million to the law firm Dentons as "suspicious."

ChainCatcher news, according to The Block, in a filing submitted on Tuesday, the U.S. SEC requested the Delaware bankruptcy court to deny Terraform Labs' hiring of Dentons U.S. LLC as its special advisor, stating that the company had made a "suspicious" payment to the latter.

The SEC stated in the filing that Terraform Labs transferred an "astonishing" $166 million to Dentons in advance fees, of which $122 million was transferred within 90 days prior to the bankruptcy filing. The SEC claimed that this move appeared to be aimed at removing assets from the company that could be used to pay any judgments arising from enforcement actions.

The agency alleged that the $122 million was transferred to an "opaque bribery fund" associated with the lawyers, and then, Terraform Labs could use it as a "war chest" to continue its legal disputes with the SEC.