Brian Curran, previously leading communications at Terraform Labs, shared his experiences of misleading practices at the company during his testimony in a New York City federal court, contributing to the legal investigations following the 2022 TerraUSD downfall. Curran expressed his initial enthusiasm for the crypto sector upon joining Terraform Labs. This quickly turned into disillusionment due to deceptive directions from the company’s founder, Do Kwon.
A notable instance of this deception occurred in May 2021, when Terraform’s UST stablecoin briefly detached from its peg to the US dollar. Curran revealed that he was instructed to inaccurately inform the public through an X post, declaring that the coin’s stability needed “time to recalibrate.”
Later, Curran discovered that UST’s recovery was artificially fueled by a trading firm dubbed Jump Trading. A former employee at Jump Trading has testified in court about Kwon’s “backroom deal” with Jump. The whistleblower confirmed that Terra’s re-peg was indeed artificial.
Expressing his frustration and anger at these directives, Curran recognized it as an attempt to spread false information; he said:
I was fairly angry because I realized that he had tried to deceive me, to write a post that he knew to be false.
This incident aligns with the Securities and Exchange Commission’s (SEC) allegations of fraud against Terraform Labs and Kwon. The SEC accuses them of misleading investors by not truthfully disclosing the stability of UST and the usage of LUNA coins.
Curran also told the jury about the difficulties he faced, including internal disputes and aggressive social media engagement by Kwon, which exacerbated the challenges of his role. He also recounted an event where the depegging of Terra’s currency caught him off-guard during a trans-Pacific flight. These events and ethical conundrums allegedly compelled him to quit his role at Terraform.
These revelations further illuminate the narrative of Terraform Labs’ internal challenges and deceitful practices. The trial by the United States SEC against Kwon began on March 25, following his release from custody in Montenegro. This legal action is pivotal in addressing the alleged fraud within Terraform Labs as the Balkan nation’s Supreme Court contemplates his extradition.
As of now, Kwon is facing charges from the SEC for violating the Securities Act and the Exchange Act. In September 2022, his home country, South Korea, issued an arrest warrant for violating the country’s national markets law.
