- By Annabelle Liang
- Business reporter
Terraform Labs Founder Do Kwon
United States regulators have issued charges against South Korean cryptocurrency entrepreneur Do Kwon, accusing him and his company Terraform Labs of orchestrating a multi-billion dollar crypto asset securities fraud.
The Singapore-based firm Terra Luna And TerraUSD tokens crashed last year, resulting in losses estimated at more than $40bn (£33.5bn).
Mr Kwon And Terraform Labs did not immediately respond to a request for comment.
“We allege that they repeated false and misleading statements to build trust before causing devastating losses for investors,” said the SEC.
The SEC reported that Terraform Labs sold an interconnected suite of crypto asset securities and raised billions of Dollars from investors, many of which remain unregistered.
The SEC furthermore accused Mr Kwon And Terraform of deceiving investors by promising that tokens would increase in value and that the stability of them was guaranteed.
The US financial regulator has charged the founder of a cryptocurrency project, Do Kwon, with fraud. According to the complaint issued by the US Securities and Exchange Commission (SEC), Kwon allegedly misled investors by claiming that his project, TerraUSD, was backed by the US dollar and would track the US dollar’s value.
Kwon’s scheme was popularly known as ‘cryptocrash’, a term coined after the value of cryptocurrencies plummeted in 2018, leading to a $42bn loss according to blockchain analytics firm Elliptic. Major cryptocurrencies, such as Bitcoin, Ethereum, and Tether, were among the biggest losers.
The SEC also accused Kwon of failing to disclose his whereabouts, although he had denied being in hiding. On Twitter, he said: “For any government agency that has shown interest in communicating, we are in full cooperation and we don’t have anything to hide.”
Kwon is facing charges for fraud and breaching capital markets laws in his native country, South Korea.
