The Securities and Exchange Commission (SEC) has requested a summary judgment in its case against Do Kwon, the founder of Terraform Labs, asserting that the alleged fraud and sale of securities is “clear, undisputed, and overwhelming.” This move seeks to forgo a jury trial and expedite the legal proceedings.
Notably, Kwon’s legal team also recently requested a summary judgment, but they advocated for their position in the case, claiming that the SEC had not provided sufficient evidence to prove that Terraform Labs was indeed selling securities.
For context, Terraform Labs’ stablecoin, TerraUSD (UST), experienced a significant depegging event last year. This event had a ripple effect on the native token LUNA, leading to substantial losses in the crypto market that are still being felt.
In the SEC’s motion filed on Thursday, Kwon and his company are accused of orchestrating a fraudulent scheme that resulted in “a total market loss of $45 billion, including significant losses for U.S. investors.” The SEC alleges that Kwon knowingly deceived investors about the stability of the securities and TerraUSD while offering and selling a range of crypto asset securities.
It’s worth noting that Do Kwon is currently in Montenegro, where he is serving a sentence for document forgery and awaiting extradition in connection with this case. The legal battle between Kwon and the SEC underscores the significant regulatory scrutiny surrounding the cryptocurrency and blockchain industry and highlights the potential consequences for individuals involved in projects facing allegations of fraud or securities violations.
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