US court rules in favor of SEC in Do Kwon, Terraform Labs case

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A United States district court has ruled in favor of the Securities and Exchange Commission (SEC) regarding allegations that Terraform Labs and its former CEO, Do Kwon, offered and sold unregistered securities.

According to court documents, the court granted summary judgment for the SEC on Count IV of the Amended Complaint, involving the defendants’ unregistered offers and sales of LUNA and MIR tokens in violation of Sections 5(a) and (5c) of the Securities Act. 

However, the New York-based court  granted summary judgment for the defendants over the alleged unregistered offer and sale of security-based swaps.

Excerpt from the U.S. District Court in Southern District of New York’s ruling against Do Kwon and Terraform Labs. Source: Courtlistener

In addition, the court denied the defendants’ motions to exclude the testimony of two SEC experts, Dr. Bruce Mizrach and Dr. Matthew Edman.

However, it also rejected the securities regulator’s motion to exclude the testimony of defense expert Dr. Terrence Hendershott.

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The SEC claims Kwon orchestrated a fraudulent cryptocurrency scheme which wiped out at least $40 billion of market value in 2022.

This is a developing story, and further information will be added as it becomes available.

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