The latest chapter in the high-stakes legal performance between Terraform Labs and the Securities and Exchange Commission (SEC) unfolded in a Manhattan courtroom, despite the unexpected absence of Do Kwon. The defiant crypto executive’s extradition to the United States was halted by the Montenegro court of appeal, leaving him in Europe serving time for a forged passport charge. This decision was a significant setback for the US authorities, who had also requested Do Kwon’s extradition.
Absence of Do Kwon in the Manhattan Courtroom
Despite Do Kwon’s absence, the scheduled hearings in the Terraform Labs vs. SEC case proceeded as planned. Zack Guzman, a journalist reporting on the trial, mentioned that both parties – Terra and the SEC – came fully prepared for the civil proceeding.
Judge Rakoff presided over the trial and outlined the ground rules, stating that only four-word objections would be allowed, and the case was expected to last a fortnight.
Jury Selection and Opening Statements
The jury selection process commenced, and the first panel consisted of six women and three men jurors. The courtroom took a brief detour with some light-hearted humor about New York sports, which apparently did not resonate well with Korean media.
Two Central Claims in the Case
Once serious matters were back on the agenda, Judge Rakoff made it clear that the case would revolve around two primary claims:
- Did Terraform Labs misrepresent Chai using Terra?
- Did Terraform Labs mislead on why UST could be pegged to $1?
Both the SEC and Terraform Labs were granted thirty minutes each to present their arguments.
SEC’s Argument: Fraud and Not Technology
The SEC led off with their argument, maintaining a firm stance that the case was about fraud and not technology. The SEC’s allegations against Terraform Labs echoed those made against SBF, highlighting misrepresentations and misleading statements.
Defense Counter: Failure Doesn’t Equal Fraud
The defense responded with a similar claim from Do Kwon’s earlier interview, emphasizing that “Failure doesn’t equal Fraud.” The counsel also accused the SEC of selectively using facts and hinted that Chai had indeed used Terra.
Looking Ahead: The Trials Continue
The trials are set to continue for a two-week period, with many crypto enthusiasts eagerly anticipating another potential loss for the SEC. Zack Guzman’s live reporting on Twitter has piqued the interest of several community members, who have requested more detailed updates on the trial’s progress.
“I’d gladly issue updates if CT actually wants them,” Guzman replied. As we monitor the trial closely, it remains intriguing to see how things will unfold without Do Kwon’s physical presence in the courtroom.
