US SEC lawyer: Terra is a scam and a house of cards

Fraud allegations against Terraform Labs and its founder Do Kwon were made in his absence. Devon Staren, a lawyer for the US Securities and Exchange Commission (SEC), stated during a civil trial held in the Southern District of New York that Terra was a scam, a house of cards that collapsed, causing investors to lose almost everything. According to the SEC's estimate, by May 2022, Terra's value had plummeted, the entire system eventually collapsed, and investors lost more than $40 billion.

In addition, Mr. Kwon promoted Terraform Labs' blockchain for the simple payment application "Chai" in Korea, but the SEC concluded that it had never actually been used and all promotional content was false.

Terraform Labs lawyer Luis Pellegrino argued that the SEC relied only on evidence favorable to the SEC and testimony from witnesses who hoped to receive whistleblower rewards if the SEC prevailed. In addition, Do Kwon's lawyer, David Patten, argued that Do Kwon never described cryptocurrency as completely risk-free.