2024

David

Terra

The much-anticipated civil <a href="https://bitcoinist.com/terraform-labs-in-the-hot-seat-trial-begins/" target="_blank" rel="noopener ">trial</a> between Terraform Labs, its embattled founder Do Kwon, and the US Securities and Exchange Commission (SEC) began on Monday in Manhattan, marking a pivotal moment in the ongoing scrutiny of the crypto space and regulatory oversight. 
<h2 id="do-kwon-terra-trial-day-1">Do Kwon / Terra Trial: Day 1</h2> 
Zack Guzmán, the award-winning Web3 host and founder of Coinage Media, was live on site and provided a summary from the courthouse via X, noting a stark contrast in attendance compared to the <a href="https://bitcoinist.com/crypto-to-gangster-sbf-photo-in-jail-comes-to-light/" target="_blank" rel="noopener ">Sam Bankman-Fried (SBF) trial.</a> Despite the lesser crowd, the significance of the trial was palpable, with both parties presenting their opening arguments before a carefully selected jury of nine – a process that included its share of courtroom levity, particularly from US District Judge Jed Rakoff. 
<blockquote class="twitter-tweet" data-width="500" data-dnt="true"> 
 NEW: Do Kwon / Terra vs. SEC off to a hot start in Manhattan court today 
 We already got a jury selected along with opening statements from both the SEC and defense teams (plus’s some pretty hilarious material from Judge Rakoff) 
 Here’s everything from Day 1 <img src="https://s.w.org/images/core/emoji/14.0.0/72x72/1f9f5.png" alt="🧵" class="wp-smiley" style="height: 1em; max-height: 1em;"> <a href="https://t.co/vl74lUgFZs" rel="nofollow" target="_blank">pic.twitter.com/vl74lUgFZs</a> 
 — Zack Guzmán (@zGuz) <a href="https://twitter.com/zGuz/status/1772316946253361579?ref_src=twsrc%5Etfw" rel="nofollow noopener" target="_blank">March 25, 2024</a>
</blockquote> 
Guzmán remarked, “Eventually landed on a jury of just 3 men and 6 women – mostly minorities. Of the three men, one is divorced, […] The divorcee is rocking a New York Giants jacket. Judge Rakoff jokes that he is also a Giants fan… “That’s why I’m wearing black, because I am in mourning.” 
Related Reading: <a href="https://bitcoinist.com/terraform-labs-in-the-hot-seat-trial-begins/" target="_blank" rel="noopener ">Terraform Labs In The Hot Seat: Trial Begins As Do Kwon’s Final Extradition Decision Looms</a> 
Besides that, Judge Rakoff and the opening statements set the tone for what promises to be an intense legal confrontation. Rakoff laid out ground rules from the jump: “Trial expected to take 2 weeks. Only 4-word objections allowed. The only way you can get me mad is a speedy objection. You say 3 words: ‘Objection, lack of foundation’.” 
The SEC’s opening salvo framed the case as a clear instance of fraud, drawing parallels to arguments used in the recent trial against Sam Bankman-Fried and FTX. Central to the SEC’s accusations are claims that Terraform Labs misrepresented the use of its blockchain in the Chai mobile payment app and misled investors about the stability of its <a href="https://bitcoinist.com/terraform-labs-files-for-bankruptcy-in-the-us/" target="_blank" rel="noopener ">TerraUSD stablecoin</a>, which was designed to maintain a peg to the dollar. 
Attorney Devon Staren presented a concise yet potent argument: “Terra was a fraud, a house of cards, and when it collapsed, investors lost nearly everything.” On the other side, Terraform’s defense, articulated by David Patton, pivoted on a critical distinction between failure and fraudulent intent. 
Patton’s assertion, “Failure doesn’t equal fraud,” seeks to challenge the SEC’s narrative by suggesting that the collapse of TerraUSD was a consequence of market volatility rather than deceptive practices by Terraform Labs and Do Kwon. 
The SEC’s case hinges on two main allegations: that Terraform Labs and Do Kwon misrepresented the stability and functionality of TerraUSD and that it falsely claimed its blockchain was utilized in the Chai payment app. These claims are not just about investor losses but also about trust in the blockchain ecosystem and the integrity of its architects. 
Terraform’s defense strategy involves not only refuting these allegations but also highlighting the innovative nature of their work in the cryptocurrency space. The defense hints at forthcoming evidence that will demonstrate the actual usage of Terra’s blockchain technology in the Chai app, countering the SEC’s claims of misinformation. 
As the trial against Do Kwon progresses, both parties are expected to present detailed evidence and expert testimonies to support their arguments. The SEC will likely delve deeper into the technical and financial mechanisms that led to TerraUSD’s instability, while Terraform’s defense will aim to contextualize the challenges and uncertainties inherent in pioneering new financial technologies. 
At press time, Terra Luna Classic (LUNC) traded at $0.000169259. 
<img loading="lazy" decoding="async" class="size-full wp-image-289665" src="https://bitcoinist.com/wp-content/uploads/2024/03/LUNCUSD_2024-03-26_10-12-11.png?resize=1024%2C472" alt="Terra Luna Classic price" width="1024" height="472" srcset="https://bitcoinist.com/wp-content/uploads/2024/03/LUNCUSD_2024-03-26_10-12-11.png?resize=1024%2C472?w=3628 3628w, https://bitcoinist.com/wp-content/uploads/2024/03/LUNCUSD_2024-03-26_10-12-11.png?resize=1024%2C472?w=640 640w, https://bitcoinist.com/wp-content/uploads/2024/03/LUNCUSD_2024-03-26_10-12-11.png?resize=1024%2C472?w=768 768w, https://bitcoinist.com/wp-content/uploads/2024/03/LUNCUSD_2024-03-26_10-12-11.png?resize=1024%2C472?w=980 980w, https://bitcoinist.com/wp-content/uploads/2024/03/LUNCUSD_2024-03-26_10-12-11.png?resize=1024%2C472?w=1536 1536w, https://bitcoinist.com/wp-content/uploads/2024/03/LUNCUSD_2024-03-26_10-12-11.png?resize=1024%2C472?w=2048 2048w, https://bitcoinist.com/wp-content/uploads/2024/03/LUNCUSD_2024-03-26_10-12-11.png?resize=1024%2C472?w=750 750w, https://bitcoinist.com/wp-content/uploads/2024/03/LUNCUSD_2024-03-26_10-12-11.png?resize=1024%2C472?w=1140 1140w, https://bitcoinist.com/wp-content/uploads/2024/03/LUNCUSD_2024-03-26_10-12-11.png?resize=1024%2C472?w=3000 3000w" sizes="(max-width: 1000px) 100vw, 1000px" data-recalc-dims="1">

Do Kwon And Terra Vs. SEC: Day 1 Is Off To A Hot Start

Table of Contents

Bitcoinist

Other articles published on Mar 26, 2024

Missed the Pepe Pump? Shiba Inu Rival Poodl Inu is Set to Take Over the Meme Coin Market Next

Fetch.ai (FET) Price Ready for 50–60% Rally After a Successful Three-Week Correction

Seamless Access: Using an Existing Wallet with Rabet

Mintlayer Reveal Layer 3 ZkThunder Network

AI Revolutionizes Luxury Resale Markets

Top Meme Coins To Turn Your $1K Investment into $100,000

Join our free newsletter for daily crypto updates!