Terraform Labs is now facing allegations of false claims as the trial before the SEC draws to a close

According to Terraform’s attorney, Louis Pellegrino, who supposedly defended co-founder Do Kwon’s public declarations as true, the SEC’s case was based on selectively provided evidence.

The trial between Terraform Labs and the US Securities and Exchange Commission (SEC) is drawing to a close, and lawyers for the crypto company have accused it of spreading several unfounded claims about its platform.

A Reuters story from April 5 states that attorneys for the SEC claimed in federal court that Terraform’s story was “based on falsehoods.”

Among these untruths were promises of an interface with a payment app in South Korea and guarantees about the reliability of the algorithmic stablecoin TerraUSD (UST).

According to Terraform’s attorney, Louis Pellegrino, who supposedly defended co-founder Do Kwon’s public declarations as true, the SEC’s case was based on selectively provided evidence.

The SEC’s civil trial against Terraform began more than a year after the agency sued the company in February 2023.

The SEC’s lawyers used the analogy of Terra’s 2022 “house of cards” collapse to describe the company’s performance throughout the trial.

The consequences stemming from the collapse of Terra had a substantial adverse effect on the cryptocurrency market, affecting notable entities including FTX, BlockFi, Celsius, and others, which were subsequently forced to file for bankruptcy.

Kwon, co-founder of Terraform, is now in Montenegro awaiting a ruling on extradition petitions from the United States and South Korea; hence, the trial has continued without him.

Falsified travel papers were among the allegations that led to Kwon’s arrest in March 2023. The trial in SEC v. Terraform Labs was postponed until March 25 by Judge Jed Rakoff in January so that Kwon could be accommodated.

In addition to former Binance CEO Changpeng Zhao, who is scheduled for a sentencing hearing on April 30, and former Celsius CEO Alex Mashinsky, who is scheduled for a criminal trial in January 2025, there are other notable people in the crypto field who are facing legal processes in the US.

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