BlockNews
FOLLOW ON X
  • CRYPTO
  • FINANCE
  • POLITICS
  • MEMECOINS
  • NFT
  • TECHNOLOGY
  • OPINION
No Result
View All Result
BlockNews
  • CRYPTO
  • FINANCE
  • POLITICS
  • MEMECOINS
  • NFT
  • TECHNOLOGY
  • OPINION
No Result
View All Result
BlockNews
Home BUSINESS

SEC Sues Terraform Labs And Its Founder, Do Kwon, For Fraud

by BlockNews Team
February 18, 2023
in BUSINESS, CRYPTO, MEDIA, POLITICS
Reading Time: 4 mins read
A A
1
SHARES
14
VIEWS
Share on XShare in TelegramShare on Reddit
  • Terraform Labs and Do Hyeong Kwon are being sued by the US SEC.
  • The complaint alleges that billions were lost to the defendants’ fraudulent scheme.
  • The crypto community questions how the US SEC is against TFL and Do Kwon.

The United States Securities and Exchange Commission (SEC) has sued the company behind the collapsed stablecoin—Terraform Labs—and its co-founder, Do Kwon, for committing fraud which led to the loss of $40 billion of market value.

Since the fall of Terraform Labs and its stablecoins (USTC and LUNA) in 2022, the SEC has been hot on the chase of its CEO, Do Kwon, claiming that he was a mastermind behind the fraudulent act.

On February 16, the SEC published a press release announcing its lawsuit against the crashed crypto firm, alleging that Terraform Labs and Do Hyeong Kwon had planned a multi-billion dollar digital assets securities fraud involving an algorithmic stablecoin and various digital asset securities.

According to the U.S. SEC, the defendants generated billions of dollars from investors by offering and selling an “inter-connected suite of crypto asset securities,” the SEC further claimed the defendants conducted such acts in unregistered transactions.

In the statement, the Securities and Exchange Commission stated that mAssets, security-centric swaps developed to pay returns by reflecting the rate of stocks of United States firms. Terra USD (UST), also called “algorithmic stablecoin,” allegedly maintained its peg to the U.S. dollar by being interchangeable for Terraform’s other crypto asset securities, LUNA.

In a complaint made by the SEC, the U.S. regulatory body alleged that from April 2018 till the fall of the crypto company in May 2022, both Do Kwon and Terraform Labs proposed and sold investors other methods to invest in their crypto company, using the security tokens “MIR” (mirror tokens) and LUNA tokens.

“Defendants’ crypto asset securities offerings involved an array of interrelated tokens that were created, developed, promoted, offered, and sold by Defendants as profit-seeking investments,” the complaint reads.

According to the investigation carried out by the SEC, Terraform and Do Kwon marketed the virtual asset securities to investors in the U.S. and overseas, alleging that the tokens would increase in value and lauding organizational efforts to do so.

The SEC has accused Terraform and its wanted CEO of promoting a “yield-bearing” blockchain protocol created by Terraform. “Anchor Protocol” promised to pay 19-20% interest on Terraform’s crypto assets.

The defendants were guilty of touting and marketing the protocol and misleading the public by announcing that a famous Korean e-mobile payment app, “Chai,” had used Terraform blockchain to process and settle transactions between traders and traders’ clients.

SEC chair Gary Gensler commented on the SEC lawsuit against Terraform and Do Kwon, stating that the defendants neglected to provide the people with “full, fair, and truthful disclosure” as mandatory for a host of crypto assets securities.

The Crypto Community Reacts to SEC’s Approach

Although the crypto community does not support Terraform Labs and Do Kwon’s actions, they question how the U.S. SEC is going after the defendants. Crypto lawyers have been vocal about the recent activities of the SEC regarding the Terraform and Do Kwon case.

A Web3 lawyer, Mike Selig, penned his thoughts on Twitter, aiming that the SEC had contradicted itself by characterizing UST as an investment contract but as a security.

“SEC complaint against TFL and Do Kwon alleges that LUNA and UST are securities. In a novel theory, the SEC characterizes UST as an investment contract and security bc, which could be exchanged for security (LUNA). Under this theory, nearly anything can be a security,” Selig said.

Conclusion

The US SEC lawsuit against Terraform Labs and its co-founder, Do Kwon, almost a year after the company’s crash. Diligent investigations have proven that the defendants planned the fraudulent scheme, which resulted in a loss of over $40 billion in investors’ funds.

Tags: Do KwonLunnasecTerraform LabsUST
TweetShareShare
Previous Post

Funders Of Sam Bankman-Fried’s $250M Bail Made Public

Next Post

Around The Block – FEB 18 Week in News

DON'T MISS THESE! HOT OFF THE PRESS

Toncoin and Telegram: The Sleeping Giant of 2025?
BITCOIN

Toncoin and Telegram: The Sleeping Giant of 2025?

July 1, 2025
Crypto Supply Shock: Bitwise Predicts Bullish Runs for BTC, But Shows Doubt With ETH and SOL
BITCOIN

Crypto Supply Shock: Bitwise Predicts Bullish Runs for BTC, But Shows Doubt With ETH and SOL

July 1, 2025
SEC Plans Shortcut for Crypto ETFs With New Listing Rules
CRYPTO

SEC Plans Shortcut for Crypto ETFs With New Listing Rules

July 1, 2025
Donald Trump Threatens Elon Musk with DOGE Audit
FINANCE

Donald Trump Threatens Elon Musk with DOGE Audit

July 1, 2025
Jerome Powell Says July May be Too Early for Rate Cuts, But Doesn’t Rule it Out
FINANCE

Jerome Powell Says July May be Too Early for Rate Cuts, But Doesn’t Rule it Out

July 1, 2025
Deutsche Bank Eyes 2026 Launch for Bitcoin and Ethereum Custody
FINANCE

Deutsche Bank Eyes 2026 Launch for Bitcoin and Ethereum Custody

July 1, 2025
Load More

Related News

Toncoin and Telegram: The Sleeping Giant of 2025?

Toncoin and Telegram: The Sleeping Giant of 2025?

July 1, 2025
Crypto Supply Shock: Bitwise Predicts Bullish Runs for BTC, But Shows Doubt With ETH and SOL

Crypto Supply Shock: Bitwise Predicts Bullish Runs for BTC, But Shows Doubt With ETH and SOL

July 1, 2025
SEC Plans Shortcut for Crypto ETFs With New Listing Rules

SEC Plans Shortcut for Crypto ETFs With New Listing Rules

July 1, 2025
Donald Trump Threatens Elon Musk with DOGE Audit

Donald Trump Threatens Elon Musk with DOGE Audit

July 1, 2025
Jerome Powell Says July May be Too Early for Rate Cuts, But Doesn’t Rule it Out

Jerome Powell Says July May be Too Early for Rate Cuts, But Doesn’t Rule it Out

July 1, 2025
Twitter Telegram Threads

BLOCKNEWS.COM

BlockNews

BlockNews.com is your premier source for real-time cryptocurrency, blockchain, and financial market news.

Our mission is to deliver accurate, timely, and insightful information to help both seasoned investors and newcomers navigate the evolving digital economy.

With in-depth analysis, exclusive insights, and up-to-date news, BlockNews.com keeps you informed on the latest trends in crypto, DeFi, NFTs, tech, and beyond.

Stay ahead of the herd with BlockNews.com

RESOURCES

  • About
  • Contact Us
  • Terms and Conditions
  • Privacy Policy

POPULAR TOPICS

$ADA $XRP AI Avalanche Binance Bitcoin Bitcoin ETF blackrock Blockchain BTC Business Cardano Chainlink China Coinbase Coinglass crypto cryptocurrency Crypto Exchange Crypto Regulation DeFi Dogecoin Donald Trump Elon Musk ETF eth ethereum Federal Reserve FTX grayscale Memecoin metaverse Microstrategy NFT NFTs PEPE ripple sec Shiba Inu Solana Stablecoin Technology US Web3 xrp

GET QUICKER UPDATES ON X

© 2022-2025 BlockNews.com - Crypto and NFT news website by Aiur Labs.

No Result
View All Result
  • HOME
  • CRYPTO
  • MEMECOINS
  • TECHNOLOGY
  • POLITICS
  • FINANCE
  • NFT
  • DEFI
  • GUIDES

© 2022-2025 BlockNews.com - Crypto and NFT news website by Aiur Labs.