A jury in New York has found Do Kwon, the co-founder of Terraform Labs, and the company guilty of misleading investors regarding the stability of UST.
A jury in New York has found Do Kwon, the co-founder of Terraform Labs, and the company guilty of misleading investors regarding the stability of UST.
Investors lost $40 billion when Terra's stablecoin, UST, collapsed in 2022, sending shockwaves through the cryptocurrency industry. Following a two-week trial, the SEC secured a key victory in its efforts to strengthen control of the digital currency industry with the verdict.
This ruling may potentially portend the results of Kwon's upcoming criminal trials in South Korea and the United States, where the standards for proving guilt are stricter.
92% of Terraform is owned by Kwon, who was arrested in Montenegro for using a fake passport. He could be extradited to the United States or South Korea. He is being charged with criminal fraud by both countries.
The likelihood of Kwon's extradition has increased following a recent ruling by the Supreme Court of Montenegro, which overturned earlier rulings supporting his transfer to Seoul.
The jury found, following less than two hours of deliberation, that Kwon and his business had misrepresented how Chai, a popular payment app in Korea, had utilized Terraform's blockchain technology.
The ruling also exposed false claims regarding the stability of the UST stablecoin, which was said to be algorithmically based and maintain a constant value linked to the US dollar.
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