SEC accuses Terraform Labs of constructing a fraudulent empire, with the civil trial beginning over a year after the lawsuit was filed.
The United States Securities and Exchange Commission (SEC) has launched a scathing indictment against Terraform Labs PTE Ltd., accusing the blockchain company of creating what an SEC attorney called a “fraudulent empire.” The civil trial, which commenced this year, follows a lawsuit filed by the SEC in February 2023. The legal action comes after the dramatic collapse of Terra’s ecosystem in 2022, which erased tens of billions of dollars of investor wealth almost overnight.
This litigation marks a significant escalation in the SEC’s scrutiny of blockchain firms, specifically those involved with cryptocurrencies. Devon Staren, an SEC attorney, presented Terraform Labs as a “house of cards,” an operation built on shaky foundations that was doomed to fail. According to Staren, investors were left with virtually nothing following the collapse, raising…