cryptoknowmics.com
Terraform Labs and its Chief Executive, Do Kwon have been charged by the US SEC for running a "multi-billion dollar crypto asset securities fraud." In an announcement made on Thursday, the securities regulator claimed that the company's crypto assets were not registered securities.
Terraform Labs and Do Kwon Charged by SEC for Fraud
According to the lawsuit filed in the federal court for the Southern District of New York in Manhattan, the US regulator has accused Terraform and Kwon of executing a fraudulent scheme from April 2018 until the project's collapse in May 2022. The lawsuit alleges that the Singapore-based project raised billions of dollars globally by offering and selling an interconnected suite of unregistered crypto asset securities. Moreover, the complaint claims that Terraform and Kwon made false claims to investors about the appreciation in the value of the company's cryptocurrencies. They allegedly misled investors by falsely claiming that a popular Korean mobile company was using the Terra blockchain for settling transactions. Additionally, they are accused of providing misleading information about the stability of UST, the algorithmic stablecoin. The lawsuit also alleges that Terraform and Kwon marketed UST as a yield-bearing stablecoin, claiming that investors could earn up to 20 percent interest through the Anchor Protocol. The charges against Terraform and Kwon include violations of the registration and anti-fraud provisions of the Securities Act and the Exchange Act.
On The Run From Law
Kwon is wanted in South Korea for his alleged involvement in the UST collapse and there is an active arrest warrant against him. Although his current location is unknown, there are recent reports suggesting that he might be in Serbia.