The jury voted unanimously against Kwon. <\/p>\n
The United States Southern District of New York jury found Terraform Labs and its co-founder Do Kwon misled investors, acted recklessly, and are liable for civil fraud.<\/p>\n
The SEC’s Division of Enforcement Director Gurbir Grewal said in a statement<\/a> today, \u201cTerraform Labs and Kwon, its former CEO, deceived investors about the stability of the crypto asset security and so-called algorithmic stablecoin Terra USD.\u201d<\/p>\n Grewal added that, \u201cfor all of crypto\u2019s promises, the lack of registration and compliance have very real consequences for real people,\u201d noting that it is \u201chigh time\u201d for the digital asset industry to come into compliance.<\/p>\n Today\u2019s verdict comes after the SEC charged<\/a> Do Kwon for orchestrating a multi-billion fraud that led to a $40 billion loss for investors in Feb. 2023.<\/p>\n <\/p>\n LUNA, the token of the Terra blockchain, is down 3.8% to $0.89. The token, which has a market capitalization of $613 million, has slid almost 30% in the past year.<\/p>\n \u201cWe are very disappointed with the verdict, which we do not believe is supported by the evidence,\u201d said a spokesperson for Terraform Labs. \u201cWe continue to maintain that the SEC does not have the legal authority to bring this case at all, and we are carefully weighing our options and next steps.\u201d<\/p>\n In 2022, Terraform Labs<\/a> \u2013 led by the now-detained<\/a> Do Kwon \u2013 launched its native token, LUNA, and an algorithmic stablecoin, UST, which was backed by LUNA. UST lost its peg after a sharp drop in the price of LUNA, which caused a downward price spiral and run on deposits which wiped out nearly $50 billion of UST\u2019s market cap in a matter of days.<\/p>\nTerra Weighs Next Steps<\/h2>\n