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Claim review. Fraud

Contradicted

A reliable and applicable record states the opposite.

In October 2023 Terraform Labs and Do Kwon told the court that the SEC had not proven the defendants did anything wrong.

the SEC is evidentiarily no closer to proving that the Defendants did anything wrong
About
Terraform Labs PTE Ltd
Claim made by
The Block, press report
Published
30 October 2023
Original
Do Kwon and Terraform Labs' lawyers urge judge to nix SEC's allegations
Evidence score
92 How it was scored
Last reviewed
25 October 2026

Why this label

The defence filing argued the SEC had not shown the defendants did anything wrong and sought a ruling without a full trialS7. That position was rejected by later events. On 5 April 2024 a jury found Terraform and Kwon liable for fraudS1, and in June 2024 they agreed to pay more than US$4.5 billion to settleS2. Kwon then pleaded guilty to fraud in August 2025S3 and was sentenced to 15 years in December 2025S4. The published denial is contradicted by the verdict, the settlement and the guilty plea. The denial itself is reported by press, so it sits at tier C.

Current procedural position

Pre trial denial in the SEC civil case. Rejected by the jury verdict of 5 April 2024 and the June 2024 settlementS1S2. Kwon later pleaded guilty in the criminal caseS3.

Record supporting the assessment

found Terraform Labs PTE Ltd. and Do Kwon liable for defrauding investors in crypto asset securities
S1 Tier A US Securities and Exchange Commission (Gurbir S. Grewal, Division of Enforcement), Statement on Jury's Verdict in Trial of Terraform Labs PTE Ltd. and Do Kwon, 5 April 2024
DO HYEONG KWON was sentenced to 15 years in prison for committing wire fraud
S4 Tier A US Department of Justice, US Attorney's Office, Southern District of New York, Crypto-Enabled Fraudster Sentenced For Orchestrating $40 Billion Fraud, 11 December 2025

Conflicting or limiting record

the SEC is evidentiarily no closer to proving that the Defendants did anything wrong
S7 Tier C The Block (Sarah Wynn), Do Kwon and Terraform Labs' lawyers urge judge to nix SEC's allegations, 30 October 2023

Evidence score: 92 of 100

The score grades how well the record establishes this assessment. It is not a score of Terraform Labs PTE Ltd. Score = source authority + directness + corroboration + procedural accuracy + currency + reproducibility.

ComponentPointsMaxReason
Source authorityIs the source competent to establish the proposition?2830The contradicting records are the SEC jury verdict and the DOJ conviction, both tier A.
DirectnessDoes the source state the proposition or only discuss adjacent facts?1820The verdict and conviction speak directly to the denied wrongdoing.
CorroborationDo independent records support the same material point?1415The civil verdict and the criminal plea point the same way.
Procedural accuracyDoes the record settle the procedural state the claim describes?1415The denial was overtaken by a verdict, a settlement and a conviction.
CurrencyHas the record been checked against later developments?1010Checked against the 2024 verdict and the 2025 sentence.
ReproducibilityCan a reader locate the passage and repeat the assessment?810The denial is reported by The Block, which may need a subscription.
Total92100

Timeline

  1. Defence tells court the SEC has not proven wrongdoingS7
  2. Jury finds Terraform and Kwon liableS1
  3. Kwon sentenced to 15 yearsS4

Related cases

  • SEC v. Terraform Labs PTE Ltd. and Do Hyeong KwonUS District Court for the Southern District of New York. Civil. 23-cv-1346 (JSR).Stage: Jury verdict of liability on 5 April 2024, resolved by consent judgment entered on 12 June 2024.
    • Jury finds Terraform and Kwon liable for securities fraudS1
    • Consent judgment entered, settlement of more than US$4.5 billionS2S9

Responses

  • Terraform Labs and Do Kwon, 30 October 2023: Their lawyers argued the SEC had not proven the defendants did anything wrong and asked the judge to rule without trial.S7

Revision history

  • Assessment first published with label Contradicted.

Have a record that changes this assessment? See corrections and responses.

Sources

  1. S1Tier A Statement on Jury's Verdict in Trial of Terraform Labs PTE Ltd. and Do KwonUS Securities and Exchange Commission (Gurbir S. Grewal, Division of Enforcement). Regulator press release. 5 April 2024.Supports the civil jury verdict of liability for fraud. It is a statement on a civil verdict, not a criminal conviction.
  2. S4Tier A Crypto-Enabled Fraudster Sentenced For Orchestrating $40 Billion FraudUS Department of Justice, US Attorney's Office, Southern District of New York. Government press release. 11 December 2025.Supports the 15 year sentence, the forfeiture of over US$19 million and the counts. This is the conviction record.
  3. S7Tier C Do Kwon and Terraform Labs' lawyers urge judge to nix SEC's allegationsThe Block (Sarah Wynn). Press report. 30 October 2023.Origin of the pre trial denial by the defence. It reports a court filing, it does not establish the filing's merit.
  4. S2Tier A Terraform and Kwon to Pay $4.5 Billion Following Fraud VerdictUS Securities and Exchange Commission. Regulator press release. 13 June 2024.Supports the settlement figures and repeats the jury finding. The settlement resolves the civil case.
  5. S9Tier A SEC v. Terraform Labs PTE, Ltd. and Do Hyeong Kwon, No. 23-cv-1346-JSR (S.D.N.Y.)US Securities and Exchange Commission. Regulator press release. 18 September 2025.SEC distributions page. Supports the case number, the 12 June 2024 consent judgment and the 20 September 2024 Chapter 11 plan approval. Says payments run through the bankruptcy estate.
  6. S3Tier A Do Kwon Pleads Guilty To FraudUS Department of Justice, US Attorney's Office, Southern District of New York. Government press release. 12 August 2025.Supports the guilty plea, the counts and the scheme description. The scheme detail beyond the plea remains prosecution allegation.

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