Terraform Labs Founder Found Guilty of Fraud in SEC Case
In the Southern District of New York, a jury has found Terraform Labs (TFL) and co-founder Do Kwon guilty of deceiving investors and committing securities fraud.
The guilty verdict holds TFL and Kwon accountable for their actions, where they misled investors about the stability and security of cryptocurrencies and the TerraUSD algorithmic stablecoin.
SEC Enforcement Director Gurbir Grewal expressed satisfaction with the verdict, stating that the defendants caused significant harm to investors and caused billions of dollars in losses almost overnight. However, a TFL spokesperson has expressed disappointment with the verdict and stated that they believe it is not supported by the evidence.
The trial, held in absentia, lasted nine days and resulted from the SEC’s charges against TFL and Do Kwon in February 2023 of orchestrating a multibillion-dollar securities fraud. Despite the verdict, TFL is considering their options and next steps, claiming that the SEC does not have the authority to bring this case.
