You are currently viewing US SEC Charge Luna Maker Terraform Labs And Founder Do Kwon

US SEC Charge Luna Maker Terraform Labs And Founder Do Kwon

Summary:

  • The US SEC has charged Terraform Labs and its founder, Do Kwon, with fraud.
  • The company is responsible for the digital assets Terra USD and Luna, and the charges relate to the sale of an inter-connected suite of crypto asset securities.
  • The SEC alleges that the company misrepresented the stability of Terra USD and made false claims to investors, and that Kwon paraded a third-party market manipulation as a self-healing feature of the UST/Luna algorithm.

 

The Securities and Exchange Commission (SEC) of the United States has brought fraud charges against Terraform Labs and its founder Do Kwon. The company is behind the digital assets Terra USD (USDT) and Luna.

 

It is accusing the crypto company of selling an inter-connected suite of crypto asset securities. This refers to the fact that the performance of one asset within the suite can affect the performance of the other assets.

 

The SEC claimed that Terraform Labs misrepresented the stability of Terra USD, whose value is tied to Luna, another digital asset offered by the company.

 

Also read:
CcHub Launches $15M Edtech Accelerator Program For Nigeria, Kenya Startups
CBN Never Ordered PalmPay, Opay, Other Fintechs To Shutdown
Elon Musk Denies Twitter Boosting His Tweets.

 

In addition, the company used false claims to convince investors. For example, as the SEC revealed in the lawsuit, Terraform Labs claimed that the Korean mobile payment app Chai used its platform to process payments, when this was not true.

 

This is not all that the SEC is accusing the crypto company of. It added that in May 2021, after its UST dropped below $1, its founder met with a third party who bought large amounts of the it to bring its value back to the $1 peg. However, instead of revealing how it achieved this feat, Kwon paraded it as an automatically self-healing that owed its capability to the UST/Luna algorithm.

 

US SEC Charge Luna Maker Terraform Labs And Founder Do Kwon
Terraform Labs CEO Do Kwon. Image Source: MarketWatch.

 

“As alleged in our complaint, the Terraform ecosystem was neither decentralized nor finance. It was simply a fraud propped up by a so-called algorithmic ‘stablecoin’ — the price of which was controlled by the defendants, not any code,” Gurbir S. Grewal, director of the SEC’s division of enforcement said.

 

Do Kwon has already been declared wanted since September 2022 by the Interpol after South Korean authorities could not lay hands on him and it is largely believed that he is not in the country.

 

For your daily dose of tech, lifestyle, and trending content, make sure to follow Plat4om on Twitter @Plat4omLive, on Instagram @Plat4om, on LinkedIn at Plat4om, and on Facebook at Plat4om. You can also email us at info@plat4om.com and join our channel on Telegram at Plat4om. Finally, don’t forget to subscribe to OUR YOUTUBE CHANNEL.

Onwuasoanya Obinna

A reader of books and stringer of words. Passionate about Science and Tech. When not writing or reading he is surfing the web and Tweeting.