- U.S. Securities and Exchange Commission (SEC) charges Do Kwon with fraud.
- The complaint concludes that the failed UST stablecoin’s price was manipulated.
- SEC Director of Enforcement says Terra is “neither decentralized, nor finance."
While the downtrodden crypto entrepreneur Do Kwon is still out in the open, the South Korean authorities are no longer the only law enforcement institution on his back. The U.S. Securities and Exchange Commission (SEC) filed a complaint against TerraForm Labs and co-founder Do Kwon in New York on Thursday.
Moreover, the complaint claims that TerraForm Labs and Do Kwon has sold unregistered crypto tokens since April 2018, which include Terra (LUNA), Terra (UST), and are all deemed as securities. The lawsuit also points out that the fraud had stripped the United States retail and institutional investors of more than $40 billion.
More Conspiracies Emerge on Crypto Twitter
Gary Gensler and the SEC had earned themselves a reputation for numerous attempts to curb crypto - from Elon Musk’s 420 Tweet to the recent crackdown on Kraken’s staking products with a solid $30 million fine. Without any doubt, the most popular case is The SEC vs. XRP, which plays a key role in shaping cryptocurrency legislation.
However, the SEC waited nine months to tackle the $2 trillion crypto wipeout caused by TerraForm Labs and the shady South Korean entrepreneur Do Kwon. In response to this, the controversial LUNC DAO, one of the main validators of the Terra (LUNA) network, had uttered that no one has sincerely tried to repeg Terra’s own monstrosity of a stablecoin.
“It’s now clear that Do Kwon is paying him to stall The Community to prevent the re-peg and stop $LUNC from reaching $1,” concludes LUNC DAO, also sarcastically remarking that the FBI “is going to arrest anyone who has ever uttered the words Lord Do Kwon.”
LUNC & TerraClassicUSD Keep on Falling
Shortly after the shocking crypto wipeout happened back in May 2022, a forking proposal was almost unanimously passed by the Terra (LUNA) validators, even though a Twitter poll suggested the opposite just a day before.
Currently, the relaunched and rebranded Terra 2.0 crypto tokens continue to fall, even though Terra Luna Classic (LUNC) is close to getting back into the TOP 50 by global market capitalization.
At press time, the #53 ranked altcoin Terra Luna Classic (LUNC) trades at $0.00016828, according to CoinGecko. Dropping by 4% in the last 24 hours, the controversial altcoin also failed to restore the $1bn market cap, despite LUNC community’s burning efforts.
On the other hand, the renamed algorithmic stablecoin Terra Classic USD (USTC) trades at $0.028, a fraction of what the stablecoin’s price was meant to be. The thwarted stablecoin suddenly shot up to $0.04 on February 3rd, 2023, but plunged by 8.9% in the last 24 hours. This happened due to USTC’s re-peg proposal being successfully passed, but the bullish momentum was short-lived.
On the Flipside
- TerraForm Labs claims that the company hasn’t been informed about the lawsuit and pending trial.
- South Korean authorities formed a dedicated squad to find Do Kwon in Europe, but without success.
Why You Should Care
The crash of Terra (LUNA) tokens in May 2022 resulted in a domino effect on the whole crypto industry, causing mass layoffs, multi-million dollar wipeouts, and even sent numerous successful crypto hedge funds down the drain.
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