SEC Files Motion for Summary Judgment in Terraform Labs and Do Kwon Case
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Modified on: Mon, 6 Nov, 2023 at 1:26 AM
The U.S. Securities and Exchange Commission (SEC) has filed a motion for summary judgment in the ongoing Terra litigation, alleging that Terraform Labs and its former CEO, Do Kwon, orchestrated a fraudulent scheme leading to significant market losses. The SEC maintains that the evidence against the defendants is clear, undisputed, and overwhelming.
On November 2, 2023, the U.S. Securities and Exchange Commission (SEC) escalated its legal action in the ongoing Terra litigation by filing a motion for summary judgment. In this motion, the SEC asserts that it possesses "undisputed" evidence of alleged infractions committed by former Terraform Labs CEO Do Kwon and the company itself.
The SEC's filing accuses Terraform and Do Kwon of orchestrating a fraudulent scheme that resulted in approximately $45 billion in market losses, including substantial losses for U.S. investors. The motion for summary judgment also claims that the defendants fabricated Terra blockchain activity to create a false appearance of real-world transactions that did not exist. They are alleged to have misled investors about the stability of Terraform's stablecoin while concealing a secret agreement with a third party to prevent the asset from collapsing.
The SEC argues that the case against Terraform Labs and Do Kwon is overwhelming, and "no rational jury could conclude that Kwon was not liable for Terraform's violations."
This development comes after a jury found former FTX CEO Sam Bankman-Fried guilty on all counts in his fraud trial. It also follows Terraform Labs and Kwon's submission of their motion for summary judgment in an attempt to have the case dismissed quickly.
The defense's motion claims that despite a two-year investigation and extensive discovery, the SEC failed to demonstrate any misconduct by Kwon and the defendants. The defense's lawyers argue that the evidence presented by the SEC has remained unchanged even after a thorough investigation.
The SEC contends that Terraform Labs and Kwon sold unregistered securities, conducted unregistered and fraudulent blockchain transactions, and cashed out a significant amount of fiat currency. The SEC's motion for summary judgment is a significant development in the ongoing legal battle between the SEC, Terraform Labs, and Do Kwon.
(Jamie Redman, Bitcoin News, 2023)
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