The highly anticipated civil lawsuit between the U.S. Securities and Exchange Commission (SEC) and Terra (LUNA) altcoin developer Terraform Labs began today in a court in Manhattan.
The courtroom was noticeably less crowded than in previous hearings, and all participants wore suits, indicating the seriousness of the case.
The day began with jury selection, a process in which each side takes turns vetting potential jurors. The initial pool was comprised predominantly of women, a surprising development attributed to the court clerk's first day on the job. The final jury consists of three men and six women, mostly minorities. It was noteworthy that none of the selected jury members had cryptocurrency.
After the jury was selected, opening statements were made by both the SEC and defense teams. The SEC's argument mirrored previous hearings, with “This is a case about fraud” and “This case is not about technology” in its opening and closing sentences.
The defense quoted directly from an interview with Do Kwon and said, “Failure does not mean fraud.” Advocates strongly objected to the SEC's distortion of the facts.
Judge Rakoff set the ground rules early, stating that the hearing was expected to last two weeks and that only four-word objections would be allowed. A minor disagreement arose over how to refer to Do Kwon's absence, with the judge questioning whether saying “he is overseas and unavailable” would invite the jury to make assumptions. The defense accepted this statement. It is known that Kwon is currently in Montenegro after serving time in prison for a fake passport.
The trial will continue tomorrow and the world will be watching this landmark case closely.
*This is not investment advice.