Terraform Labs and Co-Founder Do Kwon Found Guilty of Fraud in SEC Case
Terraform Labs and its co-founder, Do Kwon, have been found guilty of fraud in a civil case brought against them by the United States Securities and Exchange Commission (SEC).
The jury in the U.S. District Court for the Southern District of New York delivered the verdict in federal court after a two-week trial after hearing closing arguments earlier in the day, according to an official announcement .
The SEC alleged that Terraform Labs and its former CEO, Kwon, deceived investors regarding the stability of their crypto asset security and algorithmic stablecoin called Terra USD.
Furthermore, they were accused of misleading investors about whether Terraform’s blockchain was used by a popular payment application for processing and settling payments.
“We are pleased with today’s jury verdict holding Terraform Labs and Do Kwon liable for a massive crypto fraud,” said SEC Enforcement Director Gurbir Grewal.
“Terraform Labs and Kwon, its former CEO, deceived investors about the stability of the crypto asset security and so-called algorithmic stablecoin Terra USD, and they further misled investors about whether a popular payment application used Terraform’s blockchain to process and settle payments.”
Throughout the trial, SEC attorneys likened the platform to a “house of cards” and alleged that the company and Kwon had lied to investors.
According to the verdict filed on April 5, the jury found Kwon and Terraform Labs liable for six charges.
Additionally, they determined that the platform had acted recklessly by making false or misleading statements regarding the offer or sale of TerraUSD (UST), Luna, or wLUNA.
Today, after a nine-day trial, a jury in the United States District Court for the Southern District of New
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