The US Securities and Exchange Commission (SEC) has sued Terra founder Doo Kwon and his organization TerraForm Labs for securities fraud.
,[The SEC] Today Singapore-based Terraform Labs Pte Ltd and Do Hyung Kwon are charged with orchestrating a multi-billion dollar crypto asset securities fraud involving algorithmic stablecoins and other crypto asset securities,” the SEC wrote in a statement. Press release Published on Thursday.
The statement from the regulator said that between April 2018 and May 2022, Do Kwon’s “scheme” “raised billions of dollars” by selling cryptocurrencies to investors, often involving “unregistered transactions”.
The SEC also alleges that Kwon and Terraform Labs promoted their cryptocurrency by repeatedly claiming that the token would increase in value. It said investors were “misled and defrauded” on at least one case involving Korean mobile payments using the Terra blockchain.
Finally, the SEC said that Kwon and Terraform Labs misled investors about the stability of the infamous algorithmic stablecoin. TeraUSD (UST),
Terraform Labs is the parent company of the failed stablecoin UST and the cryptocurrency Luna. The UST stablecoin was meant to have a constant $1 value through a mix of algorithms and merchant incentives linked to a sister token, luna,
UST lost its US dollar peg in May of last year and never recovered despite several Rescue efforts from Do Kwon,
community reacts
News of the lawsuit also reached the crypto community on Twitter, where many community members questioned the SEC’s actions.
Among the commenters was popular crypto trader and economist Alex Kruger, who wondered why the SEC didn’t act sooner:
Others offered theirs as well, with some users asking how the SEC hopes to act when Do Kwon and his organization are based in Asia, not the US:
Do Kwon’s whereabouts unknown
As previously reported by Cryptonews.com, do kwon do is believed to be in serbiaBut South Korean authorities have so far been unable to find him.
Earlier this year, a group of South Korean officials visit Serbia In an attempt to locate the Terra founder, but searches – at least so far – turned up no results. One Arrest warrant issued against Quan and many other Terraform executives, and Interpol has issued a red noticecalled on police officers around the world to arrest him.
International extradition experts have said this in the past Do Kwon is likely hiding in Serbia Noting that the country has never signed an extradition treaty with South Korea. Without it, experts say South Korean prosecutors could be in trouble.
It is unclear how a possible arrest order from the US will be received in Serbia if Do Kwon is confirmed to be there.
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