SEC Accuses Terraform Labs and Do Kwon of Fraudulent Activity in Ongoing Legal Battle

In a recent development, the U.S. Securities and Exchange Commission (SEC) has escalated its legal pursuit against Terraform Labs and its former CEO, Do Hyeong Kwon, commonly known as Do Kwon. The SEC has filed a motion for summary judgment, asserting that it possesses undeniable evidence of fraudulent practices conducted by the company and Kwon.

The SEC’s motion alleges that Terraform Labs and Kwon orchestrated a fraudulent scheme resulting in significant market losses, amounting to approximately $45 billion, with detrimental impacts on U.S. investors. According to the commission, the defendants manipulated Terra blockchain data to fabricate transactions, deceiving investors about the stability of Terraform’s stablecoin. Additionally, they purportedly concealed a confidential arrangement with a third party aimed at salvaging the asset from collapse.

Emphasizing the severity of the accusations,

the SEC contends that the evidence against Terraform Labs and Kwon is irrefutable, stating that no rational jury could absolve Kwon of the company’s violations.

This development follows a recent fraud trial involving former FTX CEO Sam Bankman-Fried, who was found guilty on all counts by a jury. Additionally, Terraform Labs and Kwon’s legal team sought to expedite the dismissal of the case by filing a motion for summary judgment. However, the SEC remains steadfast in its pursuit, rejecting claims of insufficient evidence presented during the investigation.

Despite assertions by the defense that the SEC failed to substantiate allegations of misconduct after a comprehensive two-year inquiry, the commission maintains that Terraform Labs and Kwon engaged in fraudulent activities, including the sale of unregistered securities and the execution of fraudulent blockchain transactions.

As the legal battle intensifies, stakeholders await further developments in this high-profile case. What are your thoughts on the SEC’s latest legal maneuver against Terraform Labs and Do Kwon? Share your perspectives in the comments below.


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