On Friday, April 6, the US SEC issued a statement saying: A jury in the US District Court for the Southern District of New York in Manhattan has found Terraform Labs and Do Kwon guilty of civil fraud charges filed by the SEC regarding : $40 billion Terra crash in May 2022.
The US SEC has accused Terraform Labs and Kwon of misleading investors about the stability of the Terra USD (UST) token, an algorithmic stablecoin. And a South Korean mobile payment app processes payments with the Terra blockchain.
The jury deliberated in New York for nine days and delivered their verdict on Friday. After lawyers from the SEC and the defendants gave their conclusions in just 2 hours
The jury agreed with SEC charges that Kwon and Terraform Labs misled investors about the stability of the stablecoin by using an algorithm that was supposed to be pegged to the US dollar. Although Kwon claims that when a stable currency loses its value, the algorithm is able to maintain the value between UST and LUNA automatically, but in fact it depends on continuous trading. Including large scale trading by institutional investors.
In a statement, the SEC reiterated that it was satisfied with the verdict that found Terraform Labs and Kwon guilty of fraud. The defendant has caused great loss. It has wiped out tens of billions of dollars in market value almost overnight. and states that all crypto pledges Failure to register and comply with the requirements leads to real consequences for people.
SEC attorneys briefed on Friday said Jump Trading is one of the organizations that has agreed with Kwon and Terraform Labs to help buy UST in a multimillion-dollar deal. When the value fell in May 2021, so that the value returned to the dollar. and then use the return to freeze value as evidence that the algorithm is effective.
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