The U.S. Securities and Exchange Commission (SEC) stressed that the ruling holds both parties accountable for a “massive cryptocurrency fraud” that resulted in “devastating losses” for investors.

The United States Securities and Exchange Commission (SEC) announced the ruling in a press release on April 5. The regulator stressed that the decision holds both parties accountable for a “massive cryptocurrency fraud” that caused “devastating losses” to investors and wiped out $40 billion in market value “overnight.”

The U.S. Securities and Exchange Commission (SEC) has not yet imposed penalties or injunctions on Terraform Labs.

A Terraform spokesperson denied the ruling and the underlying premise of its lawsuit when contacted by Reuters, saying the SEC “does not have the legal authority to bring this case.”

The company said in a separate statement that it plans to appeal the ruling.

Kwon awaits extradition

For Do Kwon, the jury's verdict only established civil liability, not criminal culpability. He faces separate criminal charges in the United States and South Korea related to the Terra collapse.

A federal judge postponed the SEC's civil trial from January to late March so that Kwon could attend the trial. However, the issue of Kwon's extradition from Montenegro remains pending. The country's Supreme Court recently blocked the process again and sent it back for reevaluation.

Both the United States and South Korea are fighting Kwon’s extradition, and Montenegro has previously ruled in favor of both countries, but the extradition process has been blocked several times.

SEC Case

Terraform Labs’ TerraUSD stablecoin collapsed in May 2022. In addition to the overnight losses mentioned by Grewal, TerraUSD’s key role in the cryptocurrency lending market led to a broader liquidity crisis.

The market crash following the TerraUSD collapse lasted for several months, with the price of Bitcoin falling from $35,000 in May to less than $20,000 in November.

The SEC issued a subpoena to Terraform Labs during the crisis in June 2022, but did not file charges until February 2023. Prior to the latest ruling, a December 2023 ruling found that Kwon and Terraform Labs violated the Securities Act of 1933. #DoKwon  #欺诈裁决