CEO of Terraform Labs Found Guilty of Violating US Securities Law
A US District Judge has ruled that Do Kwon, the CEO and founder of Terraform Labs, violated US securities law by not registering UST and LUNA as securities. The judge agreed with the Securities and Exchange Commission (SEC) that Terraform Labs offered and sold unregistered securities, which is a violation of the law. The SEC’s fraud case against Terraform will now proceed to trial by jury next month.
Deceptive Conduct with Jump Trading
Documents reveal that Do Kwon made a secret deal with Jump Trading to restore the $1 peg of UST in exchange for modifying the terms of an agreement for LUNA tokens. This deceptive conduct has implicated Jump Trading in the case.
Arrest in Montenegro
Following a significant loss in 2022, Terraform Labs and Do Kwon have faced legal troubles. The SEC has sued them, alleging that the Anchor Protocol and LUNA token are “crypto asset securities” and that they violated regulations by selling unregistered securities. Do Kwon was arrested in Montenegro, and extradition requests have been made by the US and South Korea.
Hot Take: Terraform Labs Faces Legal Consequences
Terraform Labs and its CEO, Do Kwon, are facing serious legal consequences after being found guilty of violating US securities law. The court ruling confirms that UST and LUNA were not properly registered as securities, leading to accusations of fraud from the SEC. This case highlights the importance of complying with securities regulations in the crypto industry. It also raises questions about transparency and deceptive practices within certain crypto projects. The outcome of this trial will likely have significant implications for both Terraform Labs and the wider crypto community.
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