{"id":17741,"date":"2023-02-16T23:59:17","date_gmt":"2023-02-16T23:59:17","guid":{"rendered":"https:\/\/crowdfundjunction.com\/blog\/terraform-labs-and-ceo-do-kwon-charged-by-sec-with-multibillion-dollar-crypto-fraud-regulation-bitcoin-news\/"},"modified":"2023-02-16T23:59:17","modified_gmt":"2023-02-16T23:59:17","slug":"terraform-labs-and-ceo-do-kwon-charged-by-sec-with-multibillion-dollar-crypto-fraud-regulation-bitcoin-news","status":"publish","type":"post","link":"https:\/\/crowdfundjunction.com\/blog\/terraform-labs-and-ceo-do-kwon-charged-by-sec-with-multibillion-dollar-crypto-fraud-regulation-bitcoin-news\/","title":{"rendered":"Terraform Labs and CEO Do Kwon Charged by SEC With Multibillion-Dollar Crypto Fraud \u2013 Regulation Bitcoin News"},"content":{"rendered":"

(Originally posted on : Bitcoin News )<\/b>
\n<\/p>\n

\n
\n<\/header>\n
\n\n<\/div>\n

The U.S. Securities and Exchange Commission (SEC) has charged Terraform Labs and its CEO, Do Hyeong Kwon, with fraud, alleging that Kwon and his company orchestrated \u201ca multibillion-dollar crypto-asset securities fraud.\u201d The securities watchdog insists that Kwon raised billions from investors by creating an \u201cinterconnected suite of crypto-asset securities,\u201d many of which were involved in unregistered transactions.<\/strong><\/p>\n

SEC Charges Terra\u2019s Do Kwon and Terraform Labs With Defrauding Investors<\/h2>\n

Nine months after the entire Terra blockchain ecosystem collapsed, the U.S. Securities and Exchange Commission (SEC) charged<\/a> the Singaporean company Terraform Labs Pte. Ltd. and the firm\u2019s CEO, Do Kwon<\/a>. The SEC detailed on Thursday that Terraform and Kwon raised billions from venture capitalists and created a suite of unregistered securities and mirrored assets that replicated the value of U.S. stocks. The government\u2019s complaint also mentions the now-defunct UST algorithmic stablecoin.<\/p>\n

The regulator stressed that both Terraform\u2019s employees and Kwon marketed these unregistered securities to \u201cearn a profit,\u201d and detailed that Kwon \u201crepeatedly claimed that the tokens would increase in value.\u201d Regarding the algorithmic stablecoin UST, Kwon \u201callegedly misled investors about the stability of UST,\u201d the SEC complaint notes. This is not the first time Terraform Labs had a tussle with the U.S. securities regulator, as the SEC filed an action<\/a> against the company over the Mirror Protocol and its mirrored stock assets in 2021.<\/p>\n

In 2022, a New York judge ordered<\/a> Terraform Labs to comply with the SEC\u2019s investigative subpoenas. The SEC now charges the company and Kwon with violating the registration and anti-fraud provisions of the Securities Act and the Exchange Act. \u201cWe 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,\u201d SEC chair Gary Gensler<\/a> said in a statement.<\/p>\n

Gensler further added:<\/p>\n

\n

We also allege that they committed fraud by repeating false and misleading statements to build trust before causing devastating losses for investors.<\/p>\n<\/blockquote>\n

The US regulator\u2019s charges against Terraform and Kwon follow the SEC\u2019s enforcement actions against<\/a> Kraken and its staking services. Additionally, the New York Department of Financial Services (NYDFS) told<\/a> Paxos it could no longer mint the stablecoin BUSD while also issuing a consumer notice<\/a> regarding BUSD. The SEC complaint filed against Kwon and Terraform was submitted to the US District Court for the Southern District of New York. Do Kwon was last active<\/a> on Twitter during the first week of February 2023.<\/p>\n

\n
\nTags in this story
\n<\/h6>\n
Algorithmic stablecoin<\/a>, BUSD<\/a>, consumer notice<\/a>, Crypto<\/a>, do kwon<\/a>, Fraud<\/a>, Gary Gensler<\/a>, Investors<\/a>, Kraken<\/a>, LUNA<\/a>, Mirror Protocol<\/a>, mirrored assets<\/a>, misleading statements<\/a>, multibillion-dollar<\/a>, NYDFS<\/a>, Regulatory Compliance<\/a>, SEC<\/a>, Securities<\/a>, securities watchdog<\/a>, Singaporean<\/a>, Southern District of New York<\/a>, staking services<\/a>, Subpoenas<\/a>, Terra USD<\/a>, terraform labs<\/a>, Twitter activity<\/a>, unregistered transactions<\/a>, US District Court<\/a>, UST<\/a>, Venture Capitalists<\/a><\/div>\n<\/div>\n

What do you think about the SEC\u2019s charges against Do Kwon and Terraform Labs? Share your thoughts about this subject in the comments section below. <\/strong><\/em><\/p>\n

\n
\n\n<\/div>\n
\n
\nJamie Redman <\/h6>\n

\nJamie Redman is the News Lead at Bitcoin.com News and a financial tech journalist living in Florida. Redman has been an active member of the cryptocurrency community since 2011. He has a passion for Bitcoin, open-source code, and decentralized applications. Since September 2015, Redman has written more than 6,000 articles for Bitcoin.com News about the disruptive protocols emerging today.

\n
\n
\n<\/a>
\n<\/span>\n<\/p>\n<\/div>\n<\/div>\n

Image Credits<\/b>: Shutterstock, Pixabay, Wiki Commons<\/em><\/p>\n

\n