Terraform Labs and its founder Do Kwon were found guilty of civil fraud by a jury in Manhattan on Friday. The jury agreed with the SEC that both men misled investors before the 2022 stablecoin collapse shocked crypto markets around the world. Reuters reports: The SEC accused the company and Kwon of misleading investors in 2021 about the stability of TerraUSD, a stablecoin designed to maintain the value of $1. Regulators also accused Terraform of making false claims that its blockchain was used in a popular mobile payment app in South Korea. In closing arguments, SEC attorney Laura Meehan said the platforms' success stories were “built on lies.” “If you swing big and miss and you don't tell people you missed, that's fraud,” Meehan said.
Terraform's attorney, Louis Pellegrino, told jurors Friday that the SEC's lawsuit relies on statements taken out of context and that Terraform and Kwon were honest about their product and how it works, even when it failed. said that it was. “Terraform is still around and is trying to rebuild and make its buyers whole,” he said. Regulators are seeking a civil penalty and an order to bar Mr. Kwon and Terraform from the securities industry. Kwon, who was arrested in Montenegro in March 2023, did not attend the trial that began on March 25. The United States and South Korea, where Kwon is a citizen, are seeking his extradition to face criminal charges.
