United

April

Terra

Lawyers for the United States Securities and Exchange Commission (SEC) presented the image of Terraform Labs as a fraudulent empire in which “investors lost nearly everything” on the opening day of its civil trial.
According to a March 25 Reuters report, SEC attorney Devon Staren <a href="https://www.reuters.com/technology/terraform-labs-civil-fraud-trial-set-begin-new-york-2024-03-25/" target="_blank" rel="noopener noreferrer nofollow">said</a> in U.S. District Court for the Southern District of New York that Terra was a “house of cards” that collapsed for investors in 2022. The civil trial kicked off more than a year after SEC officials filed a lawsuit against the blockchain firm in February 2023, <a href="https://cointelegraph.com/news/sec-sues-do-kwon-and-terraform-labs-for-fraud" rel="noopener noreferrer nofollow">alleging that Terra</a> and its co-founder Do Kwon “orchestrat[ed] a multi-billion dollar crypto asset securities fraud.”
<figure><img src="https://s3.cointelegraph.com/uploads/2024-03/9a54e524-8333-4b27-a994-11e93e1b35c4.png">
 <figcaption style="text-align: center;">Source: <a href="https://twitter.com/ReutersLegal/status/1772293505953444162" target="_blank" rel="noopener noreferrer nofollow">Reuters</a>
 </figcaption>
</figure>
Kwon was not present on the first day of the trial. The Terraform Labs co-founder was arrested in Montenegro in March 2023 for using falsified travel documents and sentenced to four months in prison. Though he reportedly <a href="https://cointelegraph.com/news/terra-founder-do-kwon-released-in-montenegro" rel="noopener noreferrer nofollow">had been released</a> on March 23 while awaiting extradition to either the U.S. or his native South Korea, no decision had been made at the time of publication.
The SEC alleged Terra and Kwon misled investors about the stability of TerraUSD (UST), an algorithm stablecoin that depegged from the U.S. dollar. The impact on Terra (<a href="https://cointelegraph.com/terra-price-index" rel="noopener noreferrer nofollow">LUNA</a>) and other tokens likely contributed to a significant crypto market downturn in 2022 in which several companies declared bankruptcy.
Related: <a href="https://cointelegraph.com/news/us-supreme-court-crypto-industry-regulation" rel="noopener noreferrer nofollow">US Supreme Court case could change crypto industry regulation</a>
The trial was initially scheduled to begin in January. However, SEC officials joined with Kwon’s legal team to <a href="https://cointelegraph.com/news/sec-joins-request-delay-terraform-labs-trial" rel="noopener noreferrer nofollow">push back the start date</a> to March in anticipation of the Terraform Labs co-founder joining in his defense in person. In December 2023, Judge Jed Rakoff <a href="https://cointelegraph.com/news/breaking-us-court-rules-favor-sec-do-kwon-terraform-labs-case" rel="noopener noreferrer nofollow">granted summary judgment</a> in favor of the SEC over Terra dealing with unregistered securities and in favor of Kwon and the platform for the offer and sale of security-based swaps.
Terraform’s trial is one of many cases in the crypto space expected in court in 2024. On March 28, former FTX CEO Sam Bankman-Fried will be sentenced following his conviction on seven felony charges. After pleading guilty to one felony charge, former Binance CEO Changpeng Zhao is <a href="https://cointelegraph.com/news/binance-founder-changpeng-zhao-sentencing-date-april" rel="noopener noreferrer nofollow">expected to be sentenced</a> on April 30.
Magazine: <a href="https://cointelegraph.com/magazine/us-enforcement-agencies-turning-up-heat-crypto-related-crime/" rel="noopener noreferrer nofollow">US enforcement agencies are turning up the heat on crypto-related crime</a>

Terra was a ‘house of cards’ — SEC in opening statements for civil trial

Cointelegraph

دیگر آرٹیکلز 25 مارچ، 2024 پر پبلش کیے گئے ہیں

Philippines SEC Restricts Binance Over Unlicensed Operations

RippleX urges caution amid XRPL AMM pool glitch

Avanza Innovations’ Fragments Sparks a Revolution in Real-World Asset Tokenization

Crypto Markets Witness $942M Outflow: Grayscale Spurs Bitcoin and Ethereum Withdrawals!

Crypto Profit Picks: 30X Potential Altcoins Pre-Altcoin Rally

BlockDAG is Quickly Racing to Its $600M Goal Amidst Bullish Market Sentiment; Insights On Decentr...

Join our free newsletter for daily crypto updates!