Verdict: Terraform Labs and Founder Found Liable for Fraud Charges
A federal trial jury has ruled against the collapsed crypto company Terraform Labs and its founder Do Kwon in a fraud case brought by the U.S. Securities and Exchange Commission (SEC) in February last year.
According to the SEC allegations, Kwon and his company engaged in a fraudulent scheme between April 2018 and May 2022, resulting in significant losses for US retail and institutional investors through the offering and sale of crypto asset securities.
Revealing the Verdict
- The jury in the US District Court for the Southern District of New York recently confirmed the SECโs accusations against Kwon and Terraform Labs.
- Following a nine-day trial, the jury found Kwon and Terraform Labs guilty of defrauding investors.
SECโs Response
- Gurbir S. Grewal, the SEC Division of Enforcement Director, condemned the actions of Kwon and Terraform Labs for causing harm to investors.
- He stated that the deception regarding the stability of crypto asset security and Terra USD misled investors, ultimately impacting real people due to the lack of registration and compliance.
Kwonโs Legal Troubles
- Implications: Kwon was detained in Montenegro in March 2023 and faces criminal charges in South Korea relating to Terraโs collapse and Terra USD.
- Earlier Arrest: He was apprehended while trying to board a flight to the United Arab Emirates (UAE) using a fake Costa Rican passport.
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Hot Take: Reflecting on the Verdict
A federal trial court jury has found collapsed crypto company Terraform Labs and its founder Do Kwon liable in the fraud charges brought by the U.S. Securities and Exchange Commission (SEC) in February last year.
According to the SEC, Kwon and his firm offered and sold crypto asset securities and carried out a fraudulent scheme between April 2018 and May 2022 that led to billions of dollars of losses to US retail and institutional investors.
On Friday, a jury in the US District Court for the Southern District of New York validated the SECโs claims when it found Kwon and Terraform Labs liable for defrauding investors after a nine-day trial.
Gurbir S. Grewal, the SEC Division of Enforcement Director says the actions of Kwon and Terraform Labs have caused real harm to investors.
โTerraform Labs and Kwon, its former CEO, deceived investors about the stability of the crypto asset security and so-called algorithmic stablecoin Terra USD, and they further misled investors about whether a popular payment application used Terraformโs blockchain to process and settle payments.
For all of cryptoโs promises, the lack of registration and compliance have very real consequences for real people.โ
Kwon was initially arrested in Montenegro in March 2023 after attempting to board a flight to the United Arab Emirates (UAE) with a forged Costa Rican passport. He is also facing criminal charges in South Korea related to the multibillion-dollar downfall of Terra and its stablecoin Terra USD.
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The post Jury Finds Do Kwon and Terraform Labs Liable for Defrauding Investors in Crypto Asset Securities appeared first on The Daily Hodl.
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