The U.S. Securities and Exchange Commission on Thursday charged Singapore-based Terraform Labs and founder and CEO Do Hyeong Kwon—better known as Do Kwon—with securities fraud involving its algorithmic stablecoin Terra USD and the LUNA token. The complaint, filed in the U.S. District Court for the Southern District of New York, charges the defendants with violating the registration and anti-fraud provisions of the Securities Act and the Exchange Act. “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,” said SEC Chair Gary Gensler. “We also allege that they committed fraud by repeating false and misleading statements to build trust before causing devastating losses for investors.” The SEC’s charges come nearly a year after the collapse of Terra Luna, which brought on a year-long crypto winter that saw many prominent companies, including FTX, Celsius, and Three Arrows Capital, fail last year. In June 2022, the SEC announced opening an investigation into the collapse of Terra and whether its stablecoin violated federal securities regulations. Earlier that year, the Terra ecosystem was rocked by the $60 billion implosion of the Terra stablecoin and the collapse of its LUNA token.
Full story : SEC Sues Terraform Labs and Founder Do Kwon For Securities Fraud.
