SEC Lawsuit Dismissal Sought by Do Kwon
In a significant development, the Securities and Exchange Commission (SEC) has filed a lawsuit against Terraform Labs co-founder Do Kwon in the U.S. District Court for the Southern District of New York. The lawsuit alleges that Kwon and his accomplices defrauded investors in a multibillion-dollar scheme.
The SEC's allegations include that Kwon and his company made misleading statements about the function of the blockchain in relation to South Korea-based payment system Chai. This, according to the SEC, was part of a scheme to manipulate the value of Terra, Terraform Labs' stablecoin. Terra, which was once valued at over $119.18, depegged from the U.S. dollar in May 2022, destabilizing the crypto market and causing widespread losses. Today, Terra is valued at $0.000062.
Following the collapse of the Terra ecosystem, Kwon was detained in March in Montenegro after spending nearly a year on the lam. He is currently out on bail and under house arrest. Kwon's attorneys have called the allegation regarding Swiss bank transfers "outrageous" and "a transparent attempt to make this case seem like FTX, Celsius, and other cases involving thefts of customer funds."
In response to the SEC's allegations, Kwon's lawyers have requested the lawsuit to be thrown out, stating that the SEC has yet to prove that he "did anything wrong." They claim that compelling him to provide written testimony to the commission's questions would be "inconsistent with his right to due process under the United States Constitution."
The SEC's filing states that they knew the allegation against Kwon was false when they filed the case. However, after two years of investigation, numerous depositions, and the exchange of over two million pages of documents and data, Kwon's attorneys claim that the SEC is "evidentiarily no closer to proving that the Defendants did anything wrong."
It's important to note that there are no publicly available details indicating that specific international jurists or organizations supported Do Kwon in his negotiations with the SEC regarding fraud allegations. The available information only reports that he reached a settlement with U.S. authorities, including the SEC, involving a fine and trading ban.
Meanwhile, other high-profile figures in the crypto space are also facing legal troubles. Sam Bankman-Fried, founder of FTX, is currently on trial on several fraud and conspiracy charges. Alex Mashinsky, founder of Celsius, has been charged with defrauding Celsius customers and market manipulation.
As the legal proceedings continue, the crypto industry and its investors will be closely watching the developments in this case. The outcome could have significant implications for the regulation and future of cryptocurrencies.
