The collapse of the “stablecoin” TerraUSD shocked the crypto market.
Do Kwon was behind Terra USD, a “stablecoin” that collapsed in 2022. Photo: Stevo Vasiljevic / Reuters / NTBPublished:
Less than 20 minutes ago
Updated just now
South Korean Do Kwon (32) and the company he helped start, Terraform, have been found guilty of fraud in a civil case, several international media write on Friday.
A New York jury has found that the entrepreneur and company falsely claimed their technology was used by a popular Korean payment app. They have also found that investors were misled about how stable the stablecoinstablecoin should mirror the price of other currencies or commodities TerraUSD was.
Sued by the Financial Supervisory Authority
The US Financial Supervisory Authority (SEC) filed a lawsuit last year, with accusations that the founder and the company had defrauded investors.
In this round, the SEC asked the jury only for an assessment of the question of guilt, writes Bloomberg.
The inspectorate wants the case to have financial consequences for the culprits and for Kwon and Terraform not to be allowed to do similar things again.
Terraform applied for bankruptcy protection earlier this year.
Kwon did not attend the trial, which lasted two weeks. He was arrested in Montenegro last year.
There will be a separate criminal case against the accused.
– Trying to rebuild
A lawyer for Terraform, Louis Pellegrino, told the jury Friday that the regulator’s case was built on messages taken out of context and that Terraform and Kwon had been truthful about their products and how they worked, even when they failed.
– Terraform is still out there trying to rebuild, Pellegrino said according to the report Reuters.
The company’s collapse in 2022 shocked the crypto world and caused $40 billion of investors’ money to evaporate, according to the SEC. The amount includes what investors lost in total on TerraUSD and LunaLuna, another, more traditional cryptocurrency, but which was closely linked to TerraUSD, which Kwon was behind.
TerraUSD was pegged to the dollar. However, the value of Terra fell well below one dollar, which is the level it was originally supposed to be locked at. A number of cryptocurrencies were caught off guard and plummeted in value in connection with the incident.
2024-04-05 20:50:16
#Crypto #entrepreneur #guilty #fraud
