On December 28, a U.S. federal judge made a court ruling in favor of the Securities and Exchange Commission (SEC) in a case against Terraform Labs and its founder Do Kwon. The ruling concerned the offering and sale of securities that were not registered.
U.S. District Judge Jed Rakoff in Manhattan issued a ruling in favor of the SEC on security-based swaps, according to a report by Reuters.
U.S. District Judge Jed Rakoff in Manhattan declined to grant summary judgment on the SEC's fraud accusations, indicating that this aspect of the case will proceed to trial. The trial is scheduled for January 29, 2024.
Following the ruling, neither the SEC nor representatives for Terraform and Kwon have provided any comments in response to the decision.
Apart from the legal case, Do Kwon is recognized for his association with cryptocurrencies such as TerraUSD and its counterpart Luna (CRYPTO: LUNA).
These digital currencies experienced a significant loss in 2022, with an estimated value drop of over $40 billion, primarily due to TerraUSD's failure to maintain its peg to the U.S. dollar.
The SEC has charged Terraform and Kwon with deceiving investors about the stability of TerraUSD and making claims about the potential increase in the value of its crypto tokens.
In addition to these charges, Kwon is facing fraud allegations from U.S. prosecutors in Manhattan and is currently contesting extradition to the United States.
The SEC trial against Terraform Labs and Do Kwon is postponed to March 25, allowing for Do Kwon's extradition. Legal and financial implications surround the case, emphasizing the need for cryptocurrency oversight amid allegations of a $40 billion fraud.
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cryptopotatoPrevious attempts to arrest the Terra co-founder Daniel Shin failed because a South Korean court refused to grant the arrest warrant.
CryptoSlateTerraform Labs is headquartered and registered in Singapore and this is the first time the country has publicly taken action against Do Kwon and his firm.
CryptoSlateDigital assets deposited in Celsius Network’s Earn program belong to the bankrupt company’s estate and not individual users.
decryptTerraform Labs employees have reportedly been prohibited from exiting South Korea as investigations by prosecutors continue.
Cointelegraph
NulltxSouth Korean authorities are currently investigating Terraform Labs and its employees on several charges including tax evasion and market manipulation.
CointelegraphThere have been many calls on social media for legal action against Do Kwon, and there has also been speculation that the potential departure of his legal team may be motivated by money concerns.
Cointelegraph