Business News Report
August 01, 2023

Do Kwon, LUNA and Terra Founder, Must Face Fraud Allegations from SEC

On Monday, July 31, a federal judge in the Southern District of New York stated that Do Kwon must face fraud allegations brought by the U.S. Securities and Exchange Commission.

Do Kwon, LUNA and Terra Founder, Must Face Fraud Allegations from SEC

Do Kwon is the founder of the algorithmic stablecoin Luna and blockchain network and the algorithmic stablecoin Terra, both issued by Terraform Labs. TerraUSD is a coin that is supposed to maintain a 1:1 peg to the US dollar. The value, however, was derived from a pair with another token, Luna. In contrast to stablecoins USDC (USD Coin) and USDT (Tether), Terra and Luna were not backed by actual dollars or assets stored in physical banks.

Launched in 2018, TerraUSD became the tenth-largest cryptocurrency. Nevertheless, in early May 2022, Luna and Terra’s prices crashed and have not recovered since. UST (Terra) was de-pegged from the dollar, and holders started selling it in panic. Luna Coin followed, resulting in a $60 billion loss for holders. The case is still thought of as the largest cryptocurrency fraud in history.

In September 2022, South Korean authorities issued a warrant for Kwon and five other individuals, including Nicholas Platias, a founding member of Terraform Labs, and the company’s employee Han Mo.

In March 2023, Do Kwon and Han Chang Joon, Terraform Labs’ Chief Financial Officer, were arrested at the Podgorica airport in Montenegro with forged documents.

In May, the State Prosecutor’s Office in Podgorica appealed against the previous court decision to release Do Kwon and Han Chang Joon on bail of €400,000 (approximately $439,500 at the time of writing). The individuals stayed under house arrest at Chang Joon’s residence in Montenegro.

Finally, on July 31, the U.S. Securities and Exchange Commission introduced a complaint about Terraform Labs and Do Kwon having misled investors about the stability of TerraUSD. In a ruling, Judge Jed S. Rakoff of the Federal District Court in Manhattan wrote that the regulator can move forward with the allegations.

“…Will continue to fight the SEC’s misguided and deeply flawed allegations and legal theories,”

said a Terraform Labs spokesperson, according to Reuters

Read more:

Disclaimer

In line with the Trust Project guidelines, please note that the information provided on this page is not intended to be and should not be interpreted as legal, tax, investment, financial, or any other form of advice. It is important to only invest what you can afford to lose and to seek independent financial advice if you have any doubts. For further information, we suggest referring to the terms and conditions as well as the help and support pages provided by the issuer or advertiser. MetaversePost is committed to accurate, unbiased reporting, but market conditions are subject to change without notice.

About The Author

Valeria is a reporter for Metaverse Post. She focuses on fundraises, AI, metaverse, digital fashion, NFTs, and everything web3-related. Valeria has a Master’s degree in Public Communications and is getting her second Major in International Business Management. She dedicates her free time to photography and fashion styling. At the age of 13, Valeria created her first fashion-focused blog, which developed her passion for journalism and style. She is based in northern Italy and often works remotely from different European cities. You can contact her at [email protected]

More articles
Valeria Goncharenko
Valeria Goncharenko

Valeria is a reporter for Metaverse Post. She focuses on fundraises, AI, metaverse, digital fashion, NFTs, and everything web3-related. Valeria has a Master’s degree in Public Communications and is getting her second Major in International Business Management. She dedicates her free time to photography and fashion styling. At the age of 13, Valeria created her first fashion-focused blog, which developed her passion for journalism and style. She is based in northern Italy and often works remotely from different European cities. You can contact her at [email protected]

Hot Stories
Join Our Newsletter.
Latest News

NFTs & Mining: A Digital Synergy

The rise in usage of the non-fungible tokens has changed the way we see and engage with ...

Know More

AI in Crypto

Explore the ever-evolving realm of artificial intelligence within the cryptocurrency sphere. Discover the transformative impact of AI ...

Know More
Join Our Innovative Tech Community
Read More
Read more
StarkWare Launches Stwo Cryptographic Prover for Faster Transactions and Lower Fees
Business News Report
StarkWare Launches Stwo Cryptographic Prover for Faster Transactions and Lower Fees
March 1, 2024
Figure Raises $675M Funding for Humanoid Robot Development, Collaborates with OpenAI for AI Model Research
Business News Report
Figure Raises $675M Funding for Humanoid Robot Development, Collaborates with OpenAI for AI Model Research
February 29, 2024
Telegram Plans to Sell TON at Discount to Long-Term Investors, Limiting Token Holdings to 10%
News Report Technology
Telegram Plans to Sell TON at Discount to Long-Term Investors, Limiting Token Holdings to 10%
February 29, 2024
How Icertis Leveraged Generative AI Copilots for a $250M Revenue Boost
Opinion Business
How Icertis Leveraged Generative AI Copilots for a $250M Revenue Boost
February 29, 2024
What You
Need to Know

Subscribe To Our Newsletter.
Daily search marketing tidbits for savvy pros.