The civil fraud trial involving Terraform Labs Founder Do Kwon reportedly commenced on Monday in a Manhattan court. Media journalist Zack Guzman shared a series of updates, offering more insights into the legal proceedings. A jury has been selected, and opening statements were delivered by both the SEC and defense teams, along with some amusing moments by Judge Rakoff. Day 1 Rundown The case originated in 2022 when Terraform Labs experienced a crash, leading to Kwon being arrested in Montenegro on fraud charges. Subsequent events, including extradition delays , prompted the lawyers representing Kwon to request a trial postponement initially set for January, now rescheduled to late March. However, the extradition status of Kwon remained uncertain, rendering him unavailable for the trial. According to Guzman, Judge Jed S. Rakoff established various ground rules for the trial, which is anticipated to last two weeks. Guzman further detailed the jury selection process, initially comprising 6 women and 3 men, eventually resulting in a jury consisting of 3 men and 6 women, predominantly minorities. The Devil Is In The Details While the SEC presented its arguments at the hearing, Guzman suggested their stance mirrored that of the FTX case. He noted the opening and closing statements were nearly identical, particularly concerning the lines which stated that this was a case about fraud and that this trial is not about the technology. Additionally, it was reported that the SEC launched an attack on Terraform and Kwon, alleging the fraudulent nature of the company. SEC attorney Devon Staren asserted that Terra was indeed a fraud, a house of cards, and when it collapsed, investors lost nearly everything. Conversely, Terraform lawyer David Patton defended the company, asserting that failure does not necessarily equal fraud.
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