US SEC files fraud lawsuit against Terraform Labs and Do Kwon
February 17, 2023
By Priya NV
Read Price Prediction for LUNA 2023-24
The US SEC has charged Do Kwon and Terraform Labs for committing securities fraud
The SEC has also pressed fraud charges in relation to Chai payments
The United States Securities and Exchanges Commission (SEC) has made yet another move in the stablecoin market. This time around, the regulator is going after the firm behind the collapsed algorithmic stablecoin, TerraUSD (UST). The commission has filed a securities fraud lawsuit against Terraform Labs and its founder – Do Hyeong Kwon.
A court filing on the lawsuit read,
“From at least April 2018 through May 2022 (“Relevant Period”), Terraform and Kwon offered and sold crypto asset securities in unregistered transactions and perpetrated a fraudulent scheme that led to the loss of at least $40 billion of market value, including devastating losses for U.S. retail and institutional investors.”
Notably, the lawsuit has labeled both LUNA and UST as securities. And, the SEC is going after Terraform Labs and Do Kwon for multiple reasons. The court filings highlighted their role in the promotion of the Anchor Protocol, a yield-bearing protocol that promised a return of 19-20% interest.
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