2024-04-07 20:59:37
Kwon Do-hyung (33), CEO of Terraform Labs, a key figure in the collapse of cryptocurrency Terra and Luna, lost a civil suit due to a complaint by the U.S. securities authorities. This ruling is expected to have a significant impact on his future criminal trials in the United States.
According to Reuters, on the 5th (local time), the jury at the Southern District of New York District Court acknowledged the plaintiff’s claim that “Mr. Kwon and Terraform Labs caused a large amount of loss to investors by deceiving them that Terra was safe.” Previously, the plaintiff, the U.S. Securities and Exchange Commission (SEC), filed a civil suit in 2021, claiming that Terraform Labs deceived investors about the stability of Terra and caused losses close to $40 billion (about 540 billion won).
This verdict was reached in a civil trial that was filed separately from the criminal trial. Since Mr. Kwon has been detained in Montenegro on the Balkan Peninsula in Eastern Europe since March of last year, a trial in absentia was held first, in which the defendant did not have to appear in person.
Korea and the United States have been competing to request extradition since he was arrested in Montenegro. Initially, the Montenegrin court decided to send him to the United States, but the appeals court later changed the decision to extradite him to Korea. On the 5th, the local Supreme Court invalidated Kwon’s trip to Korea, raising the possibility of him going to the United States again. Mr. Kwon wants to go to Korea, where the sentences for financial fraud are relatively low.
Mr. Kwon founded Terraform Labs in 2018 and issued Terra, a sister coin called Luna, which was designed to be pegged to $1 per coin. The SEC claims that Terraform Labs engaged in market manipulation, such as having a third party purchase a large amount of Terra to boost the price when the value of Terra fell below $1 in May 2021. He emphasized that Kwon and Terraform Labs should pay a large amount of punitive damages and that the illegal profits they made should also be recovered.
Reporter Kim Bora [email protected]
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2024-04-07 20:59:37