Terraform Labs, Co-Founder Kwon Found Guilty in Major Crypto Fraud Case
Summary:
Terraform Labs and co-founder Do Kwon have been held responsible by a U.S. court jury for defrauding investors, according to SEC Enforcement Director Gurbir Grewal. The verdict emerged from a civil enforcement case where the company and Kwon were found to have misled investors about the security of their crypto asset and its associated stablecoin, Terra USD. Further details will be provided as the story develops.
In a recent verdict, Terraform Labs and Do Kwon, its co-founder, have been declared accountable for swindling investors, relating to a legal battle against the U.S Securities and Exchange Commission (SEC). The declaration was made on April 5 by SEC Enforcement Director Gurbir Grewal. The case was heard in the U.S District Court for the Southern District of New York, where jurors, after brief consideration, held Kwon and Terraform Labs responsible in the civil enforcement case. The trial under SEC began on March 25, and Kwon attended the proceedings, although he currently resides in Montenegro while courts decide on whether to approve extradition requests from the U.S. or South Korea. Addressing the verdict, Grewal expressed satisfaction, stating “Terraform Labs and its ex-CEO Do Kwon are culpable for an extensive crypto fraud”. He further added that Terraform Labs and Kwon misled investors by over-promising on the security of their crypto asset and its so-called algorithmic stablecoin, Terra USD. They additionally provided false information about the use of Terraform’s blockchain in processing and settling payments by a well-known payment application. According to Grewal, Terraform's apparent failure to register with the SEC had "very real consequences" for investors, emphasizing the importance of compliance. The story is ongoing, and updates will be provided as more information comes to light.
Published At
4/5/2024 10:48:50 PM
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