Unchained

The Legal and Regulatory Fallout From Terra's Collapse: Who Will Pay? - Ep. 363

Jun 14, 2022

Olta Andoni, Deputy General Counsel at Ava Labs, and Ari Redbord, Head of Legal and Government Affairs at TRM Labs, dive into the fallout from the Terra stablecoin’s collapse. They discuss the urgent need for regulatory action and how the incident might reshape the landscape for stablecoins, particularly the differences between algorithmic and dollar-backed assets. Key topics include potential criminal charges against Terraform executives, the importance of international regulatory consistency, and the implications of new U.S. legislative efforts on the future of stablecoin innovation.

01:04:51

Creator website

Episode guests

Ari Redbord

Olta Andoni

AI Chapters

Episode notes

Intro

2min

Regulatory Aftermath of Terra's Collapse

20min

Navigating Stablecoin Regulation

8min

Navigating the Regulatory Landscape of Stable Coins

3min

Legal Ramifications of the Terra Collapse

16min

Navigating DeFi Regulation Post-Terra 2.0

6min

The Consequences of Non-Disclosure in Cryptographic Exploits

3min

Regulatory Implications and Future of Stablecoins Post-Terra Collapse

6min

Olta Andoni, deputy general counsel at Ava Labs, and Ari Redbord, head of legal and government affairs at TRM Labs, discuss the Terra stablecoin meltdown, implications for impending international regulations, and the history of stablecoin regulation internationally. Topics covered include:

What the most important legal issues are for the Terra meltdown
How the Terra implosion will trigger more regulation of the space
How regulators seemed to think stablecoins should be regulated even before Terra
How their approach differs between dollar-backed stablecoins vs. algorithmic vs. crypto collateral-backed coins
How European regulators want stablecoin issuers to be treated like banks
What the Lummis-Gillibrand bill would mean for US stablecoin regulation
Whether Terra’s demise will mean that regulators won’t tolerate experimentation with algorithmic stablecoins
Why regulators will be skittish about stablecoins in response to Terra’s meltdown
Why Olta and Ari were impressed by the NY Department of Financial Services guidance on stablecoins
What the establishment of SEC jurisdiction over Terraform Labs based on the Mirror investigation from last fall means for any enforcement action by the SEC over Terra
Whether Do Kwon and/or Terraform could face criminal charges in multiple jurisdictions
Why international regulatory consistency is important in the crypto space
Whether civil and class-action lawsuits against Terraform could be expected
How Terra 2.0 could open TFL up to further action from regulators and law enforcement
Why more education is needed to overcome anxiety about DeFi regulations
How hack nondisclosures could be subject to government investigation