“Today’s jury verdict confirms TFL and Do Kwon’s responsibility for a cryptocurrency fraud on a massive scale. They misled investors about the stability and security of cryptocurrency and TerraUSD, a so-called algorithmic stablecoin,” said Gurbir Grewal, SEC enforcement director.
According to him, this led to huge losses for investors, destroying tens of billions “virtually overnight.”
“We are disappointed by the verdict, which we believe is not supported by the evidence. We continue to maintain that the SEC does not have the authority to bring this case and are carefully considering our options and next steps,” a TFL spokesperson told CoinDesk.

The trial lasted nine days and took place in their absence. The SEC charged TFL and Do Kwon with orchestrating a billion-dollar securities fraud in February 2023.

On March 23, 2023, Kwon and former TFL CFO Han Chan Jung were arrested while attempting to fly from Podgorica Airport to Dubai using false passports. Zhong was extradited to Korea in February 2024.
Kwon faces numerous charges in his homeland, including violating capital markets laws. In the United States, the case is being handled by the New York Federal Prosecutor’s Office.
Let us recall that in March it became known that the co-founder of TFL would be released from prison after serving his sentence for attempting to cross the border with fake documents.

In April, the Supreme Court of Montenegro canceled Kwon’s extradition, since the decision on extradition is made by the head of the Ministry of Justice. The case will return to the Podgorica High Court.

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