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New York jury deliberates SEC's fraud case against Terraform Labs and Do Kwon

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A New York jury is deciding whether Terraform Labs and its co-founder Do Kwon are liable for allegedly misleading investors about the stability of Terra USD, an algorithmic stablecoin. The stablecoin was supposed to maintain a peg to the U.S. dollar but de-pegged in May 2022, causing a significant loss in market value.

A New York jury has begun deliberations in the SEC’s civil fraud case against Terraform Labs and its co-founder Do Kwon. The SEC has accused the defendants of misleading investors about the stability of its so-called “algorithmic stablecoin,” Terra USD. The so-called “algorithmic stablecoin” was supposed to maintain a peg to the U.S. dollar through on-chain mint-and-burn mechanics with its sister token, LUNA.

But in May 2022, the UST de-pegged and began a death spiral that eventually took down the entire Terra ecosystem, wiping out approximately $40 billion in market value in its wake

 

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