A New York jury has found Terraform Labs and its Co-Founder, Do Kwon, guilty of deceiving investors about UST’s stability.
Terra’s stablecoin UST collapse in 2022 led to a $40 billion loss for investors and sent shockwaves through the cryptocurrency sector. The verdict emerged from a two-week trial, marking a significant win for the SEC in its endeavor to tighten oversight of the digital currency space.
This judgment may also hint at the outcomes of forthcoming criminal trials against Kwon in both the United States and South Korea, where the criteria for establishing guilt are more severe.
Kwon, who controls 92% of Terraform, was detained in Montenegro for using a counterfeit passport and faces extradition to either the U.S. or South Korea. Both nations are pursuing criminal fraud charges against him.
Kwon’s potential extradition has become more likely after a recent ruling by Montenegro’s Supreme Court, challenging previous decisions favoring his transfer to Seoul.
After deliberating for under two hours, the jury concluded that Kwon and his company made false claims regarding the use of Terraform’s blockchain technology by Chai, a widely used payment app in Korea.
Additionally, the verdict pointed out misleading information about the UST stablecoin’s stability, purported to maintain a consistent value pegged to the US dollar through algorithms.
Mohammad Shahidullah
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