A jury in Manhattan found Terraform Labs and its founder Do Kwon liable on civil fraud charges, agreeing with the U.S. Securities and Exchange Commission's allegations that they misled investors about the stability of TerraUSD, a stablecoin, and falsely claimed Terraform's blockchain was used in a popular Korean mobile payment app. The SEC estimated that investors lost over $40 billion when the TerraUSD peg to the dollar could not be maintained in May 2022. The SEC is seeking civil financial penalties and orders barring Kwon and Terraform from the securities industry, and the judge will consider penalties in the coming weeks. Terraform filed for bankruptcy protection in January, and both the United States and South Korea have sought Kwon's extradition on criminal charges.
A jury in Manhattan found Terraform Labs and its founder Do Kwon liable on civil fraud charges brought by the SEC, alleging that they misled investors about the stability of TerraUSD, a stablecoin, and falsely claimed that Terraform’s blockchain was used in a popular Korean mobile payment app. The SEC estimates investors lost over $40 billion when the TerraUSD peg to the dollar could not be maintained in May 2022, leading to wider havoc in the crypto market and several companies filing for bankruptcy. Kwon, who was arrested in Montenegro in March 2023, did not attend the trial, and both the US and South Korea have sought his extradition on criminal charges.
A jury in Manhattan found former crypto CEO Do Kwon and his firm Terraform Labs liable on civil fraud charges, agreeing with the US SEC that they misled investors before the 2022 collapse of their cryptocurrency, causing widespread market havoc. Kwon, who has been detained in Montenegro since March 2023, faces extradition requests from both the US and South Korea. The SEC seeks civil financial penalties and orders barring Kwon and Terraform from the securities industry. The collapse of TerraUSD and Luna tokens led to over $40bn in investor losses and bankruptcy filings, prompting US financial regulators to crack down on shady crypto practices.
The SEC's civil fraud case against Terraform Labs and co-founder Do Kwon is now in the hands of a New York jury, with allegations of misleading investors about the stability of Terra USD (UST) and its integration with a Korean mobile payments app. The SEC argued that Kwon and Terraform Labs deceived investors about the nature of the algorithm behind UST, while the defense emphasized the known risks and market participants' role in maintaining the stablecoin's peg. Kwon, who was absent from court, remains in Montenegro as the country's Supreme Court weighs competing extradition requests from the U.S. and South Korea.
Cryptocurrency firm Terraform Labs, responsible for the collapsed TerraUSD and Luna tokens, has filed for bankruptcy in the US after losing $40bn of their value in May 2022. Co-founder Do Kwon, currently in jail in Montenegro, faces fraud charges in the US, South Korea, and ongoing legal proceedings in Singapore. The bankruptcy filing allows the company to continue operations, with CEO Chris Amani stating the action is necessary to resolve outstanding legal challenges. Do Kwon's arrest in Montenegro in March 2023 and subsequent guilty verdict for forging documents have led to a pending extradition decision to either South Korea or the US.
Terraform Labs, the company behind digital assets TerraUSD and Luna, has filed for Chapter 11 bankruptcy in Delaware following the collapse of its cryptocurrencies in 2022. The company plans to continue its operations and support litigation pending in Singapore and the U.S. involving the Securities and Exchange Commission. The bankruptcy filing comes after the SEC postponed the civil trial against Terraform Labs and co-founder Do Kwon over an alleged $40 billion cryptocurrency fraud. Kwon, who owns a 92% stake in the company, is currently in custody in Montenegro and could be extradited to the U.S. or South Korea.
Terraform Labs, the company behind the collapse of its TerraUSD and Luna stablecoins, has filed for Chapter 11 bankruptcy protection with estimated assets and liabilities in the range of $100 million to $500 million. Co-founder Do Kwon, currently jailed in Montenegro for using forged passports, faces extradition to the US to face securities fraud charges. Kwon's arrest and the company's downfall add to the list of big names in the crypto industry facing legal issues, while Coinbase continues its battle against SEC accusations.
Terraform Labs, the company behind the failed stablecoin TerraUSD, has filed for Chapter 11 bankruptcy in the US, listing assets and liabilities in the range of $100-$500 million. The company plans to meet all financial obligations to employees and vendors without requiring additional financing and intends to continue its Web3 offerings expansion. The filing comes amid ongoing legal proceedings, including litigation with the SEC over an alleged $40 billion cryptocurrency fraud linked to the collapse of TerraUSD and the token Luna.
Terraform Labs, the company behind the collapsed stablecoin TerraUSD, has filed for Chapter 11 bankruptcy in the U.S., listing assets and liabilities in the range of $100-$500 million. The company plans to meet financial obligations without additional financing and continue Web3 offerings expansion. The filing aims to navigate ongoing legal proceedings, including litigation with the SEC, linked to the collapse of TerraUSD and the more traditional token Luna. The founder, Do Kwon, faces extradition for his alleged participation in a $40 billion cryptocurrency fraud.
The U.S. SEC has agreed to delay the civil trial against Terraform Labs and co-founder Do Kwon for their alleged involvement in a $40 billion cryptocurrency fraud, in order to accommodate Kwon's extradition and attendance. The SEC opposed separate trials for Terraform and Kwon, citing the similarity of the cases, and requested a trial date of April 15 to accommodate scheduling conflicts. The case revolves around the collapse of TerraUSD and Luna, with Kwon also facing related U.S. criminal charges and an extradition request from South Korea.
A federal judge has denied Terraform Labs' motion to dismiss a lawsuit filed by the U.S. Securities and Exchange Commission (SEC), stating that the SEC has jurisdiction and a plausible claim that Terraform's stablecoin, TerraUSD (UST), the Anchor Protocol, and LUNA may have violated securities law. The judge also rejected the use of a ruling in the Ripple case, where another judge ruled that Ripple did not violate securities law in selling XRP to retail investors through an exchange intermediary. The SEC has hinted at a possible appeal, and the price of XRP dropped around 2% following the ruling.
Do Kwon, the founder of Terraform Labs, has been sentenced to four months in jail in Montenegro for falsifying official documents. Kwon and the former CEO of Terraform Labs, Chang-joon Han, were sentenced for forging travel documents, including passports and identity cards. The two men have already spent 85 days in detention and can appeal the verdict within eight days. Kwon is also facing charges in the US and South Korea relating to the collapse of Terraform Labs, and both countries have been seeking his extradition.
Do Kwon, the founder of cryptocurrency firm Terraform Labs, and another South Korean citizen have been sentenced to four months in prison by a court in Montenegro for using forged documents. Kwon was arrested in Montenegro in March on an international arrest warrant in connection with the $40 billion crash of Terraform Labs’ cryptocurrency. Both South Korea and the United States have requested his extradition from Montenegro. Kwon and five others connected to Terraform are wanted on allegations of fraud and financial crimes in relation to the implosion of the firm’s digital currencies in May 2022.
South Korean courts have frozen $2 billion worth of assets tied to Do Kwon, the CEO of Terraform Labs, as part of an investigation into the collapse of cryptocurrencies Terra Classic and Luna Classic. Kwon is facing criminal charges in the United States and is awaiting trial in Montenegro for passport fraud charges. The asset freeze prevents Kwon from disposing of assets or profits obtained through criminal activities. The frozen assets include luxury cars, apartments, financial holdings, and cryptocurrencies held in various exchanges.
Lawyers for Do Kwon, founder of collapsed crypto issuer Terraform Labs, have requested a U.S. court to dismiss charges brought against him by the Securities and Exchange Commission partly because of the lack of jurisdiction. Kwon was arrested in Montenegro last month for attempting to travel with falsified documents. Following his arrest, the SEC charged the South Korean national with securities fraud. The SEC failed to prove "personal jurisdiction" as products referenced by the regulator were "available to the world and not directed at U.S. persons," a 47-page supporting document for a motion to dismiss the charges said.
