A jury in New York has found Terra founder Do Kwon responsible for civil fraud charges.
A jury in New York has found Terra founder Do Kwon responsible for civil fraud charges. After a two-week trial, the jury reached its verdict in federal court following the closing arguments. Kwon, who was apprehended in Montenegro in March 2023, did not attend the trial, and both the U.S. and South Korea have requested his extradition on criminal charges. Terraform Labs had previously filed for bankruptcy protection in January.
The SEC had accused the company and Kwon of misleading investors with false claims about the stability of their stablecoin, TerraUSD, resulting in significant losses of around $40 billion and triggering a wider collapse in the cryptocurrency market.
The SEC's case alleged that Kwon and Terraform conspired to manipulate the market by arranging for a third party to buy a substantial amount of TerraUSD in May 2021, falsely claiming that the recovery was due to the reliability of TerraUSD's algorithms. Additionally, the regulator claimed that Kwon and the company made deceptive statements about their blockchain's integration with Chai, a payment app in Korea.
The SEC is looking for civil financial penalties and seeking orders to prohibit Kwon and Terraform from engaging in the securities industry. In December last year, a federal judge ruled that Luna and UST, the tokens associated with TerraUSD, qualified as securities subject to registration and financial regulations, paving the way for subsequent legal proceedings against Do Kwon.
This article contains links to third-party websites or other content for information purposes only (“Third-Party Sites”). The Third-Party Sites are not under the control of CoinMarketCap, and CoinMarketCap is not responsible for the content of any Third-Party Site, including without limitation any link contained in a Third-Party Site, or any changes or updates to a Third-Party Site. CoinMarketCap is providing these links to you only as a convenience, and the inclusion of any link does not imply endorsement, approval or recommendation by CoinMarketCap of the site or any association with its operators.
This article is intended to be used and must be used for informational purposes only. It is important to do your own research and analysis before making any material decisions related to any of the products or services described. This article is not intended as, and shall not be construed as, financial advice.
The views and opinions expressed in this article are the author’s [company’s] own and do not necessarily reflect those of CoinMarketCap.
