The post New Development in the Terra (LUNA) Case That Settled with the SEC: Gary Gensler Released a Statement appeared on BitcoinEthereumNews.com.

The U.S. Securities and Exchange Commission (SEC) announced in a press release today that Terraform Labs and its founder Do Kwon agreed to pay over $4.5 billion following a unanimous jury verdict. The verdict found them responsible for orchestrating a years-long fraud involving LUNA and UST crypto asset securities, resulting in massive investor losses when the scheme was unraveled. The nine-day jury trial in April revealed the extent of the defendants’ misuse of the Terraform blockchain to process transactions and deception about the stability of their crypto asset security, UST. Following the decoupling of UST from the US dollar in May 2022, the price of UST and Terraform’s other tokens dropped to almost zero, wiping out $40 billion in market value almost overnight. This led to devastating losses for countless investors, including many individual investors who invested their life savings into Terraform’s ecosystem, relying on the defendants’ lies. SEC Chairman Gary Gensler made a statement about the case: “This case confirms what the court has said time and time again: The economic facts of a product, not labels, speculation or exaggerations, determine whether a product is a security under the securities laws.” He added that Terraform and Kwon’s fraudulent activities caused devastating losses for investors and in some cases destroyed their entire life savings. SEC’s Enforcement Division Director Gurbir S. Grewal said: “Do Kwon and Terra orchestrated one of the largest securities frauds in U.S. history by, among other things, claiming to have obtained a non-illegal use case of cryptocurrencies, which was the part they were most trying to achieve. In the end, all they accomplished was lying to investors, gaining tens of billions of dollars of market value.” “It was to destroy and create a lot of victims.” As part of the settlement, Terraform agreed to pay compensatory damages…

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Filed under: News - @ June 15, 2024 9:02 pm