Judge Sides with SEC in Case Against Terra’s Do Kwon
The U.S. Securities and Exchange Commission (SEC) has pursued Terraform Labs and its founder, Do Kwon, for a year following the collapse of the stablecoin UST.
The SEC alleged manipulation of Terra tokens and financial fraud against the firm and Kwon.
Despite Kwon’s elusive actions, the SEC has persisted and recently achieved a significant milestone, moving closer to resolution.
In a recent ruling on December 28, U.S. Judge Jed Rakoff supported the SEC’s claims that Terraform Labs and Do Kwon had offered and sold unregistered securities. The judge affirmed that UST, LUNA, wLUNA, and MIR were considered securities due to their nature as investment contracts, indicating a violation of the U.S. Securities Act under Kwon’s leadership.
Although the SEC secured this win, Judge Rakoff did not grant a summary judgment on fraud allegations from either side. Instead, a jury trial is scheduled to commence on January 29, 2024.
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Multiple regulatory bodies, including those in South Korea, the United States, and Singapore, have investigated Terraform Labs and Do Kwon in connection to the Terra Luna collapse. Kwon, facing allegations of market law violations and orchestrating a fraudulent scheme, encountered legal issues in Montenegro related to document forgery.
While there was an initial motion to extradite Kwon to the United States from Montenegro, it was later overturned following an appeal by his defense team. Kwon could potentially face up to 40 years in jail if convicted of the various charges against him.
Alexander Stefanov
Reporter at CoinsPress
Alex is an experienced finance journalist and a cryptocurrency and blockchain enthusiast. With over five years of experience covering the industry, he deeply understands the complex and constantly evolving world of digital assets. His insightful and thought-provoking articles provide readers with a clear picture of the latest developments and trends in the market. His passionate approach allows him to break down complex ideas into accessible and insightful content. Follow up on his content to be up to date with the most important trends and topics - stay ahead of the curve with CoinsPress.
