Last Updated on November 3, 2023 by Bitfinsider
The SEC was unable to acknowledge the jury’s leniency toward Do Kwon and his role in helping to carry out the frauds that ultimately caused the Terra ecosystem to collapse, according to a court document dated October 27. The document submitted to the Southern District of New York U.S. District Court stated: “No rational jury could conclude that Kwon was not liable for Terraform’s violations of Exchange Act Section 10(b) and Rule 10b-5 thereunder pursuant to Exchange Act Section 20(a).”
“Evidence” of breaches by SECindicates that Kwon created and promoted Terra and its internal tokens as securities, deceiving cryptocurrency investors.
The SEC was asked to be dismissed by Kwon and Terraform Labs on the same day. They claimed that Terra Classic (LUNC), TerraClassicUSD (USTC), Mirror Protocol (MIR), and its mirrored assets (mAssets) were not securities, contrary to what the SEC had claimed.
On the other hand, the SEC asserts that Kwon and Terraform Labs engaged in fraudulent activities, offered and sold securities, and sold LUNA and MIR in unregistered transactions.
Since the collapse of the Terra ecosystem was attributed by Daniel Shin’s attorney to the “unreasonable operation of the Anchor Protocol and external attacks carried out by Do-hyung Kwon,” market maker Citadel Securities has been held accountable by the company for its alleged involvement in a “concerted, intentional effort” to cause the depeg of its TerraUSD (UST) stablecoin in 2022.
“This frivolous motion is based on false social media posts and ignores information we already provided confirming we had no role whatsoever in this matter,” Citadel Securities said in a statement.
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