Terraform Labs rebuts the SEC's "bribery fund" allegations, calling it a disturbing example of government overreach

ChainCatcher news, according to The Block, last week, the SEC requested the court to deny Terraform Labs' hiring of Dentons as its advisor, objecting to the $166 million paid by Terraform Labs to its lawyers. The SEC claimed that part of this "suspicious" amount was transferred to an "opaque escrow fund," and that this transfer was done intentionally to avoid paying a potential judgment from its enforcement actions.

In a filing on Monday, Terraform Labs again requested authorization for legal fees, stating that this is crucial for responding to the SEC's lawsuit and complying with the ongoing investigation by the U.S. Department of Justice. Terraform Labs stated that the SEC's objection is baseless and should be dismissed. Terraform Labs stated in the filing: "The SEC, which is pursuing the debtor in the SEC's enforcement action, raising such a strong objection to the debtor spending its own funds to ensure an adequate defense, is a disturbing example of government overreach." The company claimed that the SEC's true motive is to distract from the upcoming trial on March 25.

The company also pointed out that the SEC's allegations regarding the hiring of Dentons contained erroneous legal interpretations and false claims.