New York Verdict: Fraud Conviction for Do Kwon and Terraform Labs
In a recent development, a New York jury has found Do Kwon and Terraform Labs guilty of fraudulent activities in a case brought forward by the United States Securities and Exchange Commission (SEC). The verdict condemns the crypto company and its co-founder for deceiving investors through Terra USD (UST) stablecoin and the Terra blockchain.
New York Jury Issues Fraud Verdict Against Do Kwon and Terraform Labs
The SEC of the USA had accused Terraform Labs and Do Kwon of civil fraud related to the $40 billion collapse of the Terra ecosystem in May 2022. The allegations specifically targeted the misrepresentation of the stability of Terra USD (UST) stablecoin and the utility of the Terra blockchain.
– Terraform Labs and Do Kwon accused of misleading investors
– Native stablecoin, Terra USD (UST), under scrutiny
– Allegations of false claims regarding stablecoin’s functionality
According to the SEC, Kwon had misled investors by suggesting that the stablecoin algorithm could “self-repair automatically” in case of de-pegging. However, investigations revealed that the stablecoin’s value relied heavily on trading activities, including institutional investors’ transactions.
SEC Victorious in Case Against Do Kwon and Terraform Labs
The jury’s verdict, favoring the SEC, came swiftly after nine days of trial in New York. The ruling held Terraform Labs and Do Kwon liable for significant cryptocurrency fraud, causing extensive losses to investors and market value.
– SEC secures victory in crypto fraud case
– Devastating losses inflicted on investors
– Emphasis on cryptocurrency market regulations and compliance
Gurbir Grewal, the Director of the SEC Division of Enforcement, expressed satisfaction at the jury’s decision, highlighting the tangible impact of unregulated cryptocurrency activities on individuals and the market.
Prisoner Release in Montenegro
Since March 23, 2024, Do Kwon has been released from custody in Montenegro after being detained for a year due to the use of forged travel documents, alongside colleague Han Chang-joon. Following his release, Montenegro foreign police took custody of Kwon.
– Do Kwon released from Montenegro prison
– Forged travel documents led to initial arrest
– Foreign police handling Kwon’s case
Despite facing extradition to the USA, which was revoked three times during his detention, Kwon’s trial with the US SEC transpired in his absence.
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