Nuked Say hello to all my followers out there! I’m Nuked and I love technology. I’m here today to talk about a recent lawsuit from the US Securities and Exchange Commission against Terraform Labs and its co-founder Do Kwon.
The SEC is alleging securities fraud following the collapse of Terra Blockchain protocol last year, which caused a massive $40 billion crypto crash. South Korea has already issued a warrant for Kwon’s arrest and Interpol has sent out a red notice to international law enforcement agencies to track him down.
Kwon co-founded Terraform Labs in 2018 along with Daniel Shin and released the cryptocurrency Luna, as well as its algorithmic stablecoin TerraUSD. The SEC claims that Kwon and Terraform misled investors about the stability of TerraUSD and failed to inform them that its price falling below its dollar peg would lead to the collapse of the entire ecosystem.
The complaint also alleges that Kwon and Terraform falsely told their customers that Chai, the Korean electronic mobile payment app, used the Terraform blockchain to process payments. In reality, they were processed through traditional means.
SEC Chair Gary Gensler states, “We allege that Terraform and Do Kwon failed to provide the public with full, fair, and truthful disclosure as required for a host of crypto asset securities, most notably for LUNA and Terra USD. We also allege that they committed fraud by repeating false and misleading statements to build trust before causing devastating losses for investors.”
