SEC Clashes With Do Kwon and Terraform Labs in Court, Alleging ‘Clear, Undisputed’ Fraud

Last week, lawyers representing Terraform Labs and its ex-CEO Do Hyeong Kwon (Do Kwon) moved to disregard the suit brought against them by the U.S. Securities and Exchange Commission (SEC). In response, the SEC has countered with a question of its own, asserting the accountability of some the institution and Kwon. The committee maintains that the grounds amassed by the prosecution is “clear, undisputed and overwhelming.”

SEC Files Motion for Summary Judgment Against Terraform Labs and Do Kwon

On November 2, 2023, the U.S. Securities and Exchange Commission (SEC) precocious its lawsuit successful the ongoing Terra litigation by filing a motion for summary judgment. The regulatory assemblage claims to clasp “undisputed” impervious of the purported infractions committed by erstwhile Terraform Labs CEO Do Kwon and the institution itself.

The SEC’s filing alleges that “Terraform and Kwon orchestrated a fraudulent strategy that yet led to $45 cardinal successful marketplace loss, including devastating losses for U.S. investors.”

The SEC question for summary judgement further states:

Defendants fabricated Terra blockchain enactment to make the quality of real-world transactions connected the blockchain that did not exist. And they lied to investors astir the stableness of Terraform’s alleged stablecoin, portion concealing the concealed woody defendants had entered into with a 3rd enactment to prevention the plus from collapse.

The U.S. regulator believes the lawsuit is stacked against Terraform Labs and the erstwhile CEO. “No rational assemblage could reason that Kwon was not liable for Terraform’s violations,” the SEC filing insists.

The SEC’s question for summary judgement follows a assemblage of 12 uncovering the erstwhile FTX CEO Sam Bankman-Fried guilty connected each counts successful his fraud trial. It besides follows Terraform Labs and Kwon’s lawyers submitting a question for summary judgement successful an effort to get the lawsuit rapidly dismissed.

The question filed by the defence lawyer claims that contempt a two-year investigation, which encompassed extended discovery, the SEC allegedly made nary advancement successful demonstrating immoderate misconduct by Kwon and the defendants. The defendants’ lawyers argued that adjacent aft a thorough probe, the grounds presented by the SEC against the accused remained static.

The SEC’s lawyers are not buying the statement and said, “Kwon and Terraform past engaged successful a strategy to defraud the nationalist astir [the] usage and stableness of these crypto plus securities.”

The SEC insists that the Terraform Labs startup and Kwon sold unregistered securities and performed unregistered and fraudulent spoofed blockchain transactions successful bid to perpetrate fraud. Prosecutors reason that the defendants, meanwhile, “cashed out” a ample sum of fiat currency.

What bash you deliberation astir the SEC’s latest tribunal filing against Terraform Labs and Do Kwon? Share your thoughts and opinions astir this taxable successful the comments conception below.