Summary
TLDR: Terraform Labs and its founder, Do Kwon, were found liable for civil fraud charges by a New York jury, siding with the SEC. They misled investors about their stablecoin, TerraUSD, leading to $40 billion in losses and a collapse of the crypto market. Kwon did not attend the trial and is facing extradition on criminal charges. The SEC argued that they manipulated the market and made false claims about their products. Terraform Labs filed for bankruptcy protection.
Key Points
1. A New York jury has determined that Terraform Labs and its founder, Do Kwon, are liable for civil fraud charges, siding with the U.S. Securities and Exchange Commission (SEC) on Friday, according to a Reuters report.
2. The SEC alleged that Terraform Labs and Kwon misled investors about the stability of their stablecoin, TerraUSD, and made other unsubstantiated claims. The failure of Terra led to $40 billion in losses and was flagged as a key trigger in a broader collapse of the crypto market.
3. Kwon, who was arrested in Montenegro in March 2023, did not attend the trial. Both the U.S. and South Korea have sought his extradition on criminal charges. Terraform Labs filed for bankruptcy protection in January.