Summary
TLDR: Terraform Labs and its former CEO, Do Kwon, were found liable for fraud related to their stablecoin Terra USD. The SEC argued they misled investors, leading to billions in losses and bankruptcies. Kwon remains detained pending extradition, and the case concluded nearly a year after being filed.
Key Points
1. A jury found Terraform Labs and its former CEO, Do Kwon, liable for fraud on Friday.
2. The decision found that Terraform and Kwon misled investors about the stability of Terra USD, an algorithmic stablecoin that crashed back in 2022.
3. The collapse wiped billions from the crypto ecosystem and subsequently triggered a domino effect as Three Arrows Capital, a prominent crypto hedge fund at the time, and lenders like Voyager and Celsius filed bankruptcy in the weeks after the collapse.