Does the Public Inquiry into Binance’s Custody of Terraform Labs Remaining LUNC and USTC Holdings Proposal Create Legal Problems
Overview
This proposal asks the Terra Classic community to request a public inquiry into the remaining LUNC and USTC held on Binance that originated from Terraform Labs wallets. The goal is to confirm the status, ownership, and compliance of these assets under the Final Judgment from SEC v. Terraform Labs and Do Kwon. The proposal does not accuse Binance of wrongdoing and focuses solely on transparency.
Why the Inquiry Is Necessary
- Accurate accounting of remaining Terraform Labs assets
- Transparency for governance decisions
- Protection against unexpected asset movement
- Completion of the Final Judgment requirements
Legal Clarity
This proposal remains fully aligned with the Final Judgment issued in SEC v. Terraform Labs and Do Kwon. It introduces no new legal obligations and supports transparent implementation of the court’s requirements regarding Terraform Labs owned assets.
1. Alignment With the Final Judgment
Section IV of the Final Judgment defines “Terra Form Crypto Assets” and requires all such assets to be burned, destroyed, or made inaccessible. This includes assets held on chain, off chain, by Terraform Labs, by the Luna Foundation Guard, or in any wallets controlled by these entities. The mandate applies to all locations, including centralized exchanges such as Binance. This proposal seeks disclosure and burning of Terraform Labs assets that remain on exchanges, in accordance with the court order.
2. No Impact on Investor Owned Assets
This proposal does not affect LUNC or USTC owned by private users. It applies only to assets that:
- Originate from wallets listed in Trial Exhibit P301
- Were deposited into Binance using memo tags
- Qualify as “Terraform Crypto Assets” under the Final Judgment
No user wallets or balances are involved.
3. No Conflict With the SEC or Ongoing Litigation
The Final Judgment is active and enforceable. Do Kwon’s ongoing legal matters do not change the court’s requirement to destroy Terraform Labs linked assets. This proposal does not modify the judgment, interfere with litigation, challenge SEC authority, or create new obligations. It only requests community support to encourage exchange compliance with the existing burn mandate.
4. Request, Not Enforcement
The Terra Classic chain cannot compel Binance or any exchange. However, it is appropriate and lawful for the community to request disclosure, request confirmation of ownership, and request destruction of assets already ordered for burning. These actions fall within normal governance rights.
5. Purpose of This Proposal
The purpose is transparency and compliance. The proposal aims to ensure that remaining Terraform Labs assets on centralized exchanges are identified and burned, close the final category of unresolved funds, support the intent of the Final Judgment, and improve systemic safety for Terra Classic.
Conclusion
This proposal does not create legal problems. It remains factual, neutral, and aligned with the Final Judgment. Its purpose is to provide clarity and support responsible governance within the Terra Classic ecosystem.
