In Other Media-eg NYLJ Fortune 2023, CJR, NY Mag, AJE, Georgia, CSM Click here to contact us     .

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 April 1, Day 6, from thread:

Next witness is Brian Curran. SEC lawyer: What drew you to crypto? Curran: Bitcoin kept popping up

 SEC lawyer: What were you doing in the crypto area? Curran: Working in PR for crypto firms, public relations SEC lawyer: When did you hear of Terraform Labs? Curran: In 2020 on a crypto jobs board, a PR position. I interviewed with Jeff Kwon, then Do Kwon

SEC lawyer: When you go the job, how much were you paid? Curran: 60,000 UST a year. SEC lawyer: What did you do? Curran: Liaise with the community on Discord and Telegram, also on Twitter. 

SEC lawyer:  Please read from your message, here. You indicate you spoke with Do - was this a voice call? Curran: Yes. I wrote, "We're going to deploy capital, SDRs, from the stability reserve." SEC lawyer: What does that mean in layman's terms?

Curran: The company was providing money to Jump. SEC lawyer: OK, let's turn to your notes of the call. It says Do said, what? Curran: The peg is inflating the swap spread.  SEC lawyer: Here he says $100 million, not the $200 million - why? Curran: It changed

SEC lawyer: Let's focus on these messages, please read them Curran: I responded to the message about death spiral with, it's not an apples to apples comparison SEC lawyer: What did you mean by that? Curran: I'm not sure. I asked the team about it

 Curran: I had asked Do Kwon if we could mention Jump in our replies. He said no. SEC lawyer: Did you say why? Curran: No. SEC lawyer: Did you accept it? Curran: Yes. In any professional environment, there has to be a degree of trust

After a break, and before list linked to below:

Terraform lawyer: We should not suffer prejudice before Do Kwon is in Montenegro. Judge Rakoff: Since the time he fled, was he still the controlling person in Terraform? Terraform lawyer: I think so, but that was not a corporate act

 Judge Rakoff: What was his excuse for fleeing? Does the SEC have any information on this? SEC lawyer: He's the 92% owner of the company. He was indicted in Korea, which is why he fled. Judge Rakoff: Indicted for his activity vis a vis Terraform

 Do Kwon lawyer: Mr. Curran, where you said Not an apples to apples comparison, you were responding to some outsider referring to a death spiral, correct? Curran: Correct.

 [With jury out of courtroom] Judge Rakoff: I don't see how the jury can distinguish between Terraform and Do Kwon in his case. So this evidence will not come in, except maybe for completeness.  See list linked to below

 Before next witness, jury is told that if Jeffrey Kwon were called as a witness he would invoke his Fifth Amendment right not to incriminate himself to all questions. Judge Rakoff: The jury may draw an adverse inference - or not. Next witness.

 Turns out the next witness is Do Kwon - not in person and  not present-day, rather his testimony before the SEC. Judge Rakoff: We have a reader [Sidebar is requested, and granted]

Judge Rakoff: Tell the jury when this occurred. SEC lawyer: August 24, 2022. Then, play acted from then: SEC: You started Terraform Labs? Do Kwon: I owned 50%, and Daniel Shin owned 50%. Now I own 92%. And I am the only director.

 [from prior SEC Q&A]

Do Kwon: I purchased 78 million tokens, some of which have not yet been delivered. SEC: Did Terraform Labs have a Binance account? Do Kwon: Yes.

 Judge Rakoff: We'll end - and the government will complete its case tomorrow

Defense's submitted list of cases on Patreon here

More on Substack here

The case is Securities and Exchange Commission v. Terraform Labs Pte Ltd. et al., 23-cv-1346 (Rakoff) 

***

Your support means a lot. As little as $5 a month helps keep us going and grants you access to exclusive bonus material on our Patreon page. Click here to become a patron.

Feedback: Editorial [at] innercitypress.com
SDNY Press Room 480, front cubicle
500 Pearl Street, NY NY 10007 USA

Mail: Box 20047, Dag Hammarskjold Station NY NY 10017

Reporter's mobile (and weekends): 718-716-3540

Other, earlier Inner City Press are listed here, and some are available in the ProQuest service, and now on Lexis-Nexis.

 Copyright 2006-2023 Inner City Press, Inc. To request reprint or other permission, e-contact Editorial [at] innercitypress.com