Hearings have begun in New York in the SEC case against Terraform Labs and its co-founder Do Kwon. The charges relate to deceiving investors regarding the stability of the “algorithmic stablecoin” Terra USD. The SEC alleges that Kwon and Terraform Labs misled investors about UST's ability to "self-recover" from a peg deviation. Instead, the SEC alleges, UST's value was supported by ongoing trading activity, including large-scale trades by institutional investors.