| Terraform Labs Crypto Trial
Day 5 Has Victim Pharmacist Flown
in From Cali Sued OK Coin
by
Matthew Russell Lee, Patreon Book
Substack
SDNY
COURTHOUSE,
March 29 – The SEC's trial
against Terraform Labs
began on March 25. Inner City
Press was there, thread. On
November 17, 2023 US District
Court for the Southern
District of New York Judge Jed
S. Rakoff held a hearing on
potential trial experts. Inner
City Press live tweeted that
too, thread.
From March
27, Day 3, thread
From March
29, Day 5, thread
Jury entering!
Judge Rakoff: Juror 8 is
really well dressed today
[some laughter in the
courtroom] Proceed.
[Deposition of Paul Kim is
being read / acted for the
jury]
Witness who left
Jump Crypto Terraform's
lawyer: Do you have any
personal information about the
deals between Terra & Jump
Crypto? Witness: Only about
UST adoption. Terra's lawyer:
You talked about trading
during the depeg - but you
were not a trader? W: I was
not
h Terra's lawyer:
You don't know what the book
stacker is, right? Witness: I
recognize the name. It's a
trading system. Layering the
book on the exchange, that's
where the name comes from.
Terra's lawyer: You never
reviewed trades? W: I saw the
notifications
Witness: The
traders were in the Slack, I
saw the notifications there.
Terra's lawyer: You understand
that prior to the restoration
of the peg, Jump was
market-making for UST, right?
Witness: That's my
understanding. Judge Rakoff:
How much more to you have?
Do Kwon's
lawyer: We have about two
questions. Judge Rakoff:
Alright. Terra's lawyer: Chris
Drew was on the team? Witness:
I don't recognize that name.
Terra's lawyer:
Have you told Mr. Han about
your whistleblower report?
SEC: Objection! Judge:
SustainedTerra's lawyer: Was
any of the trading that you
reported in your report done
by Mr. Han? SEC: Objection. No
foundation. Judge Rakoff:
Sustained.
Terra's lawyer:
Did Mr. Han find out about
your whistleblower report?
Witness: Yes when
your lawfirm published my name
Witness: While I
was still at Jump we were
receiving the one million Luna
a month. Terra's lawyer: You
don't know if that had been
paid even before May 2021?
SEC: Objection! Judge: Rakoff.
Terra's lawyer:
You don't have any notes, do
you? Witness: If I took notes
I would have emailed them to
myself, so they'd be on a Jump
server somewhere. Terra's
lawyer: Is the reason that
Jump did not invest in Monad
that Jump was no longer a VC?
Witness: No.
Lawyer for
Do Kwon: You said you didn't
report your concerns about the
depeg because of pushback?
Witness: Yes. Lawyer for Do
Kwon: Any other examples?
Witness: Yes. Project
Nebula. Lawyer for Do
Kwon: But that wasn't about
the depeg? Witness: No. No
further Qs
[After a
sidebar, Judge Rakoff returns
and calls a break]
Back in SEC
v. Terraform Labs trial
- SEC is putting on an
expert in "digital forensics",
won't even get to cross
examination today - but there
*may* be another less scripted
witness
Expert: The LP
server just sent to the Chai
wallets, then back to the LP
wallets. Judge Rakoff: Ladies
and gentlemen, we'll break
with this witness here because
we have another witness in
from California who can only
be here today, should only
taken half an hour.Witness is
a pharmacist from California.
Witness: I learned of Do Kwon,
I looked for a stable coin and
came to UST.
SEC lawyer:
How did you learn of UST?
Witness: Articles online,
YouTube videos. SEC lawyer:
What did you hear? Witness: It
was pegged to the dollar
Witness: It
promised 20% annual return. I
took out a $400,000 loan,
bought UST and put it in the
Anchor protocol. I looked at
my investment every day. SEC
lawyer: What happened next?
Witness: May 9, I started
getting notification that
there was a de-peg.
Witness: Do
Kwon tweeted, Steady, lads and
that he was working to restore
the peg. SEC lawyer: What is
this? Witness: That's the
tweet. SEC lawyer: How much of
your $400,000 do you have
left? Witness: Only $28,000
Cross
examination: Defense: You sued
OK Coin, right? SEC:
Objection! Judge: Overruled
Witness: Yes. Defense: And you
said they misled you about
UST? Witness: Yes
Judge Rakoff: I
see Juror 5 looking at her
watch (laughter) You may go
for the weekend.
More on Substack
here
The case is
Securities and Exchange
Commission v. Terraform Labs
Pte Ltd. et al., 23-cv-1346
(Rakoff)
***
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