Latest developments in the case of Terra Luna and Do Kwon in the United States of America

In an atmosphere of anticipation, the trial of Terraform Labs, the company responsible for the Terra Luna coin, began this Tuesday. This is a major legal event in the United States, which could reveal the complexities and challenges of the cryptocurrency industry.

Terraform Labs trial in the United States.. Finally the whole truth is on the table

At the heart of this legal battle, the American Securities and Exchange Commission (SEC) accuses Terraform Labs and its founder Do Kwon of massive fraud after the collapse of the platform. The conduct of this trial could be a crucial step in efforts to regulate the cryptocurrency sector.

👈Read more: Two years after the Terra Luna scandal, Terraform Labs declares bankruptcy

In February 2023, America's top financial markets regulator, the SEC, filed a lawsuit against Terraform Labs and its president, Do Kwon.

Consequently, the latter are accused of securities fraud over crypto assets worth billions of dollars. The crux of the matter is that the platform collapsed spectacularly, emptying investors' pockets and shaking a cold-soaked cryptocurrency world over the following months.

This trial, which is being held in New York, therefore represents a key moment. This could change the way these companies monitor virtual assets in the United States. The story takes on a global dimension due to the absence of Do Kwon. Who has already been arrested and is serving a sentence in Montenegro for possession of false documents.

After a series of dramatic legal events, Montenegro decided to extradite Liss to the United States. But in South Korea, where both countries have launched international lawsuits against the former CEO of Terraform Labs. This adds even more tension to the case in New York.

👈Read more: How did the fall of Terra Luna change the Korean economy?

The collapse of Terra Luna has opened a storm for the cryptocurrency industry

Even without the presence of Do Kwon himself, The trial has begun This week with an SEC indictment accusing Terraform Labs and Kwon of misleading investors with their UST currency, which has plummeted in dollar value.

During this legal confrontation, each party had 30 minutes to present their arguments, demonstrating the crucial importance of their arguments in the upcoming decision. The spotlight is quickly focused on the strengths of each party.

Thus, the SEC team, led by attorney Devon Starin, portrayed Terraform Labs as a “paper castle,” that is, a fragile house ready to collapse. He also accused investors of misleading them about the reliability of the Tera Dollar (USTC).

On the other hand, the defense sought to define clear boundaries between the failure of the UST stablecoin and any notion of deception. Echoing Do Kwon's words in an interview before his arrest, they argued that failure does not necessarily equate to fraud.

Furthermore, before the start of the trial, Terraform Labs, through its CEO Chris Amani, broke the silence to emphasize the importance of this decision on the future of the company, offering an objective assessment of the events . This confrontation between the SEC's strategic selection of evidence and the defense's response set the tone for the debate to come.

👈Read more: Terra Luna...the story of the most famous fraud in the history of the crypto industry

The repercussions and importance of prosecuting those responsible for the Terra Luna scandal

This lawsuit against Terraform Labs comes at a crucial time for the cryptocurrency industry, highlighting tensions between blockchain executives and regulators.

It is worth noting that, in a decision issued in December 2023, Judge Jed Rakoff chose to ignore some of the accusations made by the SEC and uphold others, which demonstrates the complexity of the case and could laying the groundwork for an important precedent in how digital assets are considered securities.