Feb 17, 2023
SEC Charges Terraform Labs with $Multi-Billion Crypto Fraud
The United States Securities and Exchange Commission (SEC) has filed a lawsuit against Terraform Labs and its founder, Do Kwon, for allegedly “orchestrating a multi-billion dollar crypto asset securities fraud.” This is a serious accusation, with the SEC pointing to Terraform Labs’ now-collapsed algorithmic stablecoin, TerraClassicUSD (USTC), and its connected cryptocurrency, Terra Luna Classic (LUNC).
SEC chairman Gary Gensler said in a statement that Kwon and Terraform “failed to provide the public with full, fair, and truthful disclosure” about the two assets, which were formerly named Terra (LUNA) and TerraUSD (UST). Gensler added that the two had “committed fraud by repeating false and misleading statements to build trust before causing devastating losses for investors.”
The SEC also took issue with mAssets, crypto derivatives that mirror the stock price of publicly listed companies, and Terraform’s issuance of Mirror (MIR), a governance token for the Mirror protocol that lists mAssets.
The SEC filed a 55-page complaint in the U.S. District Court for the Southern District of New York with charges relating to violations of the registration and anti-fraud provisions of the Securities Act and the Exchange Act. In the complaint, the SEC said that Terraform and Kwon “touted and marketed” its Anchor Protocol, which at one point was advertised to pay out 20% interest on USTC deposits. It also alleged Terraform and Kwon misled investors about the stability of Terra’s stablecoin.
Last May, USTC lost its peg to the U.S. dollar, causing its price — and the price of LUNC — to effectively collapse to zero. This resulted in a wider collapse in the digital asset market that wiped out an estimated value of $40 billion.
Gensler commended the SEC’s staff on their investigation, adding that “The defendants attempted to prevent us from obtaining important information about their business.”
Kwon, a South-Korean national, is currently at large and believed to be in Serbia after leaving his residence in Singapore sometime in September following a Seoul court issuing an arrest warrant for him. Interpol reportedly issued a Red Notice for Kwon to law enforcement worldwide later in September.
Kwon has denied he’s hiding from authorities and Terraform have claimed South Korea’s case against Kwon is “highly politicized.”
The news of the SEC’s lawsuit against Terraform Labs and its founder, Do Kwon, has sent shockwaves throughout the web3 space. As the crypto-asset market continues to grow, it is important for investors to be aware of the risks associated with investing in crypto assets. As the SEC’s complaint has highlighted, it is important for investors to do their due diligence and understand the potential risks of any investment before committing to it.
It is also important for investors to understand the importance of NFTs and the potential benefits of NFT marketing. NFTs are a unique type of digital asset that are becoming increasingly popular as a way to promote and monetize digital content. NFTs can be used to create digital collectibles, digital art, and even digital assets that represent real-world assets.
NFTs are becoming increasingly popular as a promotional tool, as they can be used to create unique experiences for customers and drive engagement. NFTs can also be used to reward customers with exclusive content or experiences, such as early access to products or services.
NFTs are also becoming increasingly popular as a way to monetize digital content. NFTs can be used to tokenize digital content and create unique digital assets that can be sold or traded on the open market. This can be a great way for content creators to monetize their work, as well as for investors to capitalize on digital assets.
Given the potential of NFTs as a promotional and monetization tool, it is no surprise that NFT marketing agencies are popping up all over the world. These agencies specialize in helping companies promote their NFTs and digital assets on platforms like Twitter, Discord, and other social media platforms. They can also provide valuable insights into the NFT market and help companies create effective NFT marketing campaigns.
Ultimately, the SEC’s lawsuit against Terraform Labs and its founder, Do Kwon, serves as a reminder of the importance of understanding the risks associated with investing in crypto assets. It is also a reminder of the potential benefits of NFTs and NFT marketing, and the importance of working with a reputable NFT marketing agency in order to ensure success when selling NFTs.
Disclaimer: All investment or financial opinions expressed by MoonLanding Media are not recommendations and are intended for entertainment purposes only. Do your own research prior to making any kind of investment. This article has been generated based on trending topics, has not been fact checked and may contain incorrect information. Please verify all information before relying on it.
