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BREAKING: The Judge Announced His Decision in the Terra-SEC Case! Hot Moments Are Experienced

source-logo  en.bitcoinsistemi.com 05 April 2024 19:45, UTC

Do Kwon and Terraform Labs were found liable for fraud in a securities lawsuit.

Before the verdict was announced, the jury was deliberating whether Kwon and his company were liable for allegedly misleading investors about the stability of Terra USD (UST) and its integration with a Korean mobile payment app.

The SEC began its closing argument by explaining to the jury why they should find Do Kwon and Terra responsible for defrauding investors. They argued that there were significant omissions in what Terra told investors about Chai and UST's algorithm.

Using the metaphor of selling someone a car whose brakes don't work, the SEC implied that it doesn't matter if the seat belts or airbags (Anchor or Terra) work if the UST (brakes) don't work.

The SEC reiterated that Do Kwon specifically told his communications manager not to disclose his market-making role in Jump's 2021 reregulation. “You have all the tools you need to find defendants liable for securities fraud,” the SEC concluded.

The defense began its closing arguments around 6 p.m. and similarly continued for more than an hour. They denied the SEC's allegations. The defense also accused the SEC of taking the statements out of context and omitting context. They concluded their defense by stating that Terra was open and transparent about the risks, even disclosing death spiral risks in its white papers. They also noted that Terra experienced a “brief attack” and launched LUNA 2.0 for its stricken investors in an attempt to “make things better for the community.”

Former CEO and defendant Do Kwon did not attend the court during the hearing. Kwon remains in Montenegro, where he has been since his arrest in March 2023 for using fake Costa Rican travel documents to travel to Dubai after months on the run.

SEC Enforcement Division Director Gurbir S. Grewal said the following regarding the development:

“We are pleased with today's jury verdict holding Terraform Labs and Do Kwon liable for a massive crypto fraud. Terraform Labs and its former CEO, Kwon, deceived investors about the security of the crypto asset and the stability of its so-called algorithmic stablecoin, Terra USD, and also misled investors about whether a popular payment app was using Terraform's blockchain to process and settle payments. Through these scams, the defendants caused devastating losses for investors and wiped out tens of billions in market value almost overnight. For all the promise of cryptocurrencies, the lack of registration and compliance has very real consequences for real people. “As our team's hard work demonstrates, we will continue to use the tools at our disposal to protect the investing public, but it is time for crypto markets to adapt.”

*This is not investment advice.

en.bitcoinsistemi.com