Until then, the fugitive Do Kwon could find no opponent convincing enough to extricate him from his lair in Serbia. As the Securities and Exchange Commission decided not to go all out with its registration injunction for crypto businesses, it decided to expand its list of targets. From now on, the American policeman of Finance will take care of the Do Kwon and Terra case.
Do Kown and Terraforme Labs sued for securities fraud
All crypto companies that have failed to register their consumer service offerings with the SEC in advance will soon see what this regulator is up to. Kraken and Paxos, the developer of the BUSD stablecoin, have already paid for it. Others will certainly meet the same fate before long.
In a statement published on February 16, the SEC mentioned that:
” Today, the Securities and Exchange Commission accused Singapore-based Terraform Labs PTE Ltd and Do Hyeong Kwon of orchestrating a multi-billion dollar crypto-asset securities fraud involving an algorithmic stablecoin and other securities. of crypto-assets “.
Indeed, Terra and Kwon didn’t shy away from raising billions of dollars from crypto investors through an offering of ” interconnected suite of crypto-asset securities “. It started in April 2018 and didn’t end until the day their ” stratagem in May 2022.
These titles included among others:
- securities swaps designed to generate returns that reflect the price of US company shares;
- “mAssets”;
- MIR and LUNA tokens;
- and also an algorithmic dollar-pegged stablecoin dubbed Terra USD (UST).
Gary Gensler steps up
This attack on Terra and Do Kwon is justified by deceptions aimed at enticing crypto investors with promises of colossal returns. But the worst part of it all, especially in the eyes of the SEC, is the lack of offering registration or compliance with securities laws.
” This case demonstrates how far some cryptocurrency firms are willing to go to avoid complying with securities laws, but it also demonstrates the strength and commitment of dedicated SEC officials “, criticizes Gary Gensler.
But at the stage where we are, many are asking the question. Could the SEC be getting rid of the crypto industry forever?
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