World Crypto Global
- Written by: Jared Kirui
- Thu, 30 May 2024
- Israel
Terraform Labs and its Founder, Do Kwon, have reacheda settlement with the US Securities and Exchange Commission (SEC) followingallegations of fraud surrounding the collapse of the stablecoin TerraUSD,Reuters reported. The agreement, disclosed on a court website, arrived after ajury found Kwon and Terraform Labs liable for civil fraud charges in April.Criminal Charges Still PendingThe SEC had accused the company and Kwon of misleadinginvestors in 2021 about the stability of TerraUSD, a stablecoin designed tomaintain its value to $1. Additionally, they were accused of falsely claimingthat Terraform's blockchain was utilized in a popular Korean mobile paymentapp.The settlement, though its terms remain undisclosed,marks a significant development in the ongoing legal saga between TerraformLabs, Do Kwon, and the SEC. US District Judge Jed Rakoff in Manhattan hasrequested supporting documents from both parties by June 12. Initially, the SEC sought substantial penalties,including relinquishing $5.3 billion in alleged ill-gotten gains fromstablecoin sales, fines totaling hundreds of millions of dollars, anda ban on dealing in crypto asset securities for both Kwon and Terraform Labs.The collapse of TerraUSD and Luna, a token closelytied to TerraUSD, affected the cryptocurrency markets in May 2022, resulting inan estimated loss of over $40 billion for investors. Despite the settlement,Kwon still faces related criminal charges in both the US and South Korea,though he maintains his innocence.Kwon's extradition saga recently took a new turn afterMontenegro's Court of Appeal referred the case back to the High Court forretrial. This action followed arguments from Kwon's lawyers that questioned thevalidity of the initial ruling.Kwon's Extradition Remains UncertainThe decision to extradite Kwon was returned to the High Court in Montenegro after theCourt of Appeal granted an appeal by his legal team. The Court of Appealaccepted the arguments presented by Kwon's lawyers, canceling the previousdecision by the High Court and mandating a retrial.The initial ruling from the High Court in Podgorica,dated April 8, 2024, allowed for Kwon's extradition but was criticized forlacking decisive facts and valid reasons. The High Court must now ensure thatKwon's consent to extradition is voluntary, informed, and irrevocable. The US has requested Kwon'sextradition, filing eight charges against him and expressing a willingness toprosecute him in absentia. Kwon disappeared fromthe public eye following the catastrophic collapse of TerraUSD and Lunacryptocurrencies in 2022, which wiped out nearly $37 billion from the cryptomarket and led to several bankruptcies. He was later arrested in Montenegro.This article was written by Jared Kirui at www.financemagnates.com.
