Missing Terraform Labs boss charged by US regulator

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Updated February 17, 2023 | Published February 17, 2023

2 mins read

The US Securities and Exchange Commission becomes the latest regulator to charge Do Kwon with fraud in the Terra Luna and TerraUSD debacle.

The US Securities and Exchange Commission (SEC) has officially charged Terraform Labs boss Do Kwon in connection with last year’s LUNA and TerraUSD token crashes.

Kwon has been on the run since the collapse of the tokens. Terraform Labs, the Singapore-based firm behind the tokens, was accused of intentionally crashing the coin and its co-founder, Kwon, has been evading authorities for almost a year now.

South Korean prosecutors are trying to locate Kwon around the globe, with his last known location Serbia.

SEC chairman Gary Gensler said: “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.”

SEC is officially charging the co-founder with fraud, arguing that the company and Kwon purposefully raised billions of dollars and sold them as “an interconnected suite of crypto asset securities”. The regulator contends that many of these sales were unregistered.

Furthermore, the regulator argued that Kwon and the company repeatedly suggested that the tokens would only increase their value over time, thus misleading investors.

However, these promises came up empty when the Luna cryptocurrency hit zero in May 2022, driving an industry-wide collapse.

Some $42bn in investor money was lost, based on a report crypto intelligence firm Elliptic.

The crash of the Luna cryptocurrency had deep effects on the industry, dragging the value of Ethereum and Bitcoin down as well as triggering deeper issues with Tether, a stablecoin.

Kwon has repeatedly denied wrongdoing in the case, and said that his venture had failed as a genuine business attempt, and not as a deliberate scheme to defraud investors.

Looking for your next crypto casino? Check out: Bitcasino, Gamb.co or FortuneJack.

Written by Alex

Reporter

Alex is a well-rounded crypto writer who focuses on general market and legal developments. His main interest lies in how crypto gaming can become a more permanent part of the gaming landscape and how blockchain holds benefits to players they are not even aware of.
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