Trial of Terraform Labs: Inside The Civil Fraud Saga Of Do Kwon

The highly anticipated civil fraud trial of Do Kwon, the famed inventor of the failed cryptocurrency ecosystem Terraform Labs, began Monday in a Manhattan courtroom. Zack Guzman, a media journalist, has been providing frequent updates via a series of postings on the social networking site X, revealing significant insights into this high-profile judicial procedure.

The case goes back to early 2022, when Terraform Labs imploded, causing a great deal of uncertainty in the market. The aftermath of the implosion was not too kind to Kwon, who ended up in the hands of law enforcement in Montenegro, charged with fraud. But the journey to Kwon’s trial has been full of twists and turns regarding his extradition to the United States.

Amidst these difficulties, Kwon’s legal team filed a motion to postpone the initial trial from the first week in January until the last week of March. Although the court fulfilled this applicant’s wishes, her appearance at the trial was a matter of question.

With the trial at long last moving to its starting block, Judge Jed S. Rakoff did not hesitate to set a series of “ground rules” to govern the anticipated two-week legal battle. One particularly notable rule addressed objections, with the judge stating, “The only way you can get me mad is a speedy objection. You say 3 words: “Objection for being foundationless.”

Guzman’s deals also give insights into the jury selection process, where the witnesses comprised six women and three men, whose final jury comprised three men and six women, mainly minorities.

SEC Echoes FTX Case In Terraform Fraud Trial

The prosecution, composed of the Securities and Exchange Commission (SEC), made a series of references to the FTX case in its opening statements. Guzman suggested that the SEC’s arguments mirrored those presented in the FTX case, with the opening and closing lines being nearly identical: “The case is about fraud” and “Trial is not about technology.”

In the meantime, Reuters news agency published on the SEC attack on Terraform Labs and Do Kwon. So, Mr. Devon Staren, attorney, said, “Terra was a scam, a house that was built on a pile of cards, and when it collapsed, investors lost almost everything.” Nevertheless, David Patton, legal representative of Terraform Labs, went on insisting that “Failure does

As time progresses, the crypto community and legal experts will be glued to the trial outcomes, determined to become first-hand witnesses to how the case might ultimately affect crypto assets’ regulatory environment.

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