The US Securities and Exchange Commission is suing the creator of the collapsed Terra blockchain protocol for securities fraud following last year’s meltdown that sent reverberations throughout the cryptocurrency industry. (via theverge)
According to the SEC’s complaint, Terraform Labs and its co-founder Do Kwon “perpetuated a fraudulent scheme that led to the loss of at least $40 billion of market value.”
Today we charged Singapore-based Terraform Labs PTE Ltd and Do Hyeong Kwon with orchestrating a multi-billion-dollar crypto asset securities fraud involving an algorithmic stablecoin and other crypto asset securities.
— U.S. Securities and Exchange Commission (@SECGov) February 16, 2023
Kwon co-founded Terraform Labs in 2018 with Daniel Shin and went on to release the cryptocurrency Luna later that year. The company launched its algorithmic stablecoin TerraUSD in 2020, which was linked to Luna to help maintain its dollar peg. That’s why when TerraUSD started crashing last year, so did Luna, vaporizing the billions of dollars hopeful investors threw at the cryptocurrencies.
