US Judge Rules That Terraform Labs and Founder Do Kwon Sold Unregistered Securities
A US judge has ruled that Terraform Labs, a collapsed crypto company, and its founder Do Kwon offered and sold two digital assets as unregistered securities. The ruling came in response to a fraud case filed by the US Securities and Exchange Commission (SEC) against the company and Kwon. The SEC alleges that they facilitated a multi-billion dollar fraud and violated federal securities laws. District Judge Jed S. Rakoff granted the SEC’s request for summary judgment on the allegations that Kwon and Terraform Labs sold LUNA and MIR tokens as unregistered securities. However, the judge dismissed the SEC’s claim regarding unregistered security-based swaps.
Trial for Fraud Claims Scheduled for January
Judge Rakoff denied both parties’ requests for summary judgment on the fraud claims, which will now be decided at a jury trial scheduled for January 24th. Kwon was arrested in Montenegro in March on charges related to the collapse of the Terra ecosystem. Both the US and South Korea are seeking his extradition to face fraud charges.
Appeal Granted for Retrial
Kwon appealed his extradition to both countries after winning an appeal against a court ruling in Montenegro. The Appeals Court ordered a retrial in the Podgorica Basic Court due to a judge who refused to hear Kwon’s arguments.
Hot Take: Terraform Labs Found Guilty of Selling Unregistered Securities
A US judge has ruled that Terraform Labs, along with its founder Do Kwon, violated federal securities laws by offering and selling two digital assets as unregistered securities. The ruling came after a request for summary judgment from both the US Securities and Exchange Commission (SEC) and Terraform Labs in an ongoing fraud case. The judge sided with the SEC’s allegations that LUNA and MIR tokens were sold as unregistered securities. However, the claim regarding unregistered security-based swaps was dismissed. The fraud claims will now proceed to a jury trial scheduled for January. Kwon’s extradition to face fraud charges related to the collapse of the Terra ecosystem is still being contested.
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