Terraform Labs and co-founder Do Kwon were charged with “orchestrating a multi-billion dollar crypto asset securities fraud” by the SEC in February.

Terraform Labs and co-founder

In a development shrouded in secrecy, Terraform Labs, the company behind the collapsed cryptocurrency ecosystem Terra, and the U.S. Securities and Exchange Commission (SEC) have agreed to keep certain documents confidential ahead of their upcoming civil trial. This move raises questions about transparency and the potential for hidden truths in the highly anticipated courtroom battle.

The lawsuit claims Terraform Labs misled investors about the stability of its algorithmic stablecoin UST and its native token LUNA, which both dramatically crashed in May 2022, causing widespread financial losses.

Terraform Labs and Do Kwon have denied the allegations, calling the SEC’s lawsuit “meritless” and a “prejudice-driven assault.”

The Confidentiality Agreement

The specific details of the confidential documents remain unknown, but they are reportedly related to “sensitive commercial information” and “trade secrets.”

Both parties agreed to a protective order signed by Judge Jed Rakoff of the U.S. District Court for the Southern District of New York, which seals the confidential documents from public view.

Judge Rakoff indicated a low likelihood of approving requests to unseal the documents unless there is a “compelling reason” to do so.

Implications and Concerns

The decision to keep certain documents confidential has sparked concerns about transparency and accountability in the case. Critics argue that sealing documents could shield potential wrongdoing and impede public understanding of the allegations against Terraform Labs.

Proponents of the agreement argue that protecting sensitive commercial information is essential to preserve a fair trial and prevent harm to unrelated parties.

The decision comes amid heightened scrutiny of the crypto industry following a series of high-profile collapses and concerns about systemic risk.

What’s Next

The civil trial between Terraform Labs and the SEC is scheduled to begin in May 2024.

Meanwhile, Do Kwon remains a fugitive, with an Interpol red notice issued for his arrest.

The fate of Terraform Labs and the potential consequences of the lawsuit for the broader crypto industry remain uncertain.


The decision to keep certain documents confidential in the Terraform Labs vs. SEC case adds a layer of intrigue to an already complex and high-stakes legal battle. While proponents maintain it protects business interests and ensures a fair trial, critics warn it could obscure potential wrongdoing and hinder public understanding of the case. As the trial approaches, attention will remain focused on the unsealed documents and the outcome of this pivotal conflict in the crypto landscape.