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The legal complications of collapsed Terraform Labs and its co-founder <a href="https://news.todayq.com/do-kwon-faces-deportation-to-south-korea-us-to-reply/" rel="noopener noreferrer nofollow">Do Kwon</a> don’t seem to end here. The latest developments reveal that Terraform Labs is still stuck in a trial over civil fraud allegations linked to the 2022 collapse of its TerraUSD stablecoin. On the other hand, Do Kwon is still waiting for his extradition decisions in Montenegro. SEC sees Terraform as a House of cards 
According to reports, one of the biggest financial watchdogs, the US Securities and Exchange Commission (SEC) had represented Terra’s case as a “fraud” and “house of cards.” The commission claims that investors suffered huge losses when the blockchain firm crumbled and went on to wipe out around $40 billion in assets.
However, this legal battle stands as another chance for the US SEC to efforts in its ongoing campaign to assert its control over the cryptocurrency industry. The analysts expect that the outcome of this case will have certain implications not only for Terraform and Kwon but also for the broader crypto market.
It is important to note that Kwon’s legal scenario based in Montenegro has led to an unusual trial setup. While civil suits typically wait for criminal proceedings to conclude here Terraform founder’s extradition to the US is still pending. This has directly delayed any potential criminal trial.
The commission is seeking civil penalties against the alleged, however, it is also hunting for a return of ill-gotten gains from Terraform. They are arguing here that the firm misled investors about the stability of TerraUSD. It even talked about Terraforms’ links with the&nbsp;Korean payment app Chai. Implication of the charges 
The report highlighted that Terraform had denied the accusations and asserted that Kwon believed in the company. It added that the co-founder did not defraud anyone and argued that the actions taken at that time were in pursuit of stabilizing their cryptocurrencies.
On the other hand, US District Judge Jed Rakoff had ruled that Terraform is liable for selling unregistered securities. This ruling completely aligns with the SEC’s argument and position taken in the case. Meanwhile, the Terraform intends to go against this ruling.
As this trial moves ahead, it is expected to include evidence linked to Jump Trading’s allegation and its involvement in propping up TerraUSD. This might also hold text messages indicating worry about TerraUSD’s stability.
Witnesses in this case include alleged whistleblowers, executives from Jump Trading and Wintermute Trading Ltd., who are expected to testify. The trial coincides with the sentencing hearing for Sam Bankman-Fried (SBF).

Terraform faces SEC showdown, What’s next for Do Kwon?

Todayq News

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